THURSDAY 18SEP 2008

Economy of War & Elections!
Every market participant is undergoing a phase of emotion and anger laced with greed also. But only the Short term traders are going to benefit from the strange moves of the FED while the long term investor is looking askance with disappointment. The adage that long term investing is the best method is being proved wrong at this moment. As one said on the CNBC, the temples of capitalism are crumbling. Unfortunately, it is contagious and affects the long term story!

What were the regulators doing? Who allowed this venom to accumulate over 30 years? Why don't the Central Banks allow markets to do the price discovery by itself? Why do they keep pumping life into dead financial institutions? Every nation should find out about itself if they are also doing the same thing; and also if there is a need to continue with the economic model of War and Electoral compulsions!

India is not directly affected by the developments too much. But the fact is that when there will be no money around the world then who will come to invest or, where would the money come from for developmental work. Everything would now depend on our inherent strength only. At the same time we should also be hopeful due to the fact that whatever money would be available around the world, a good portion of it could be invested in the long term lucrative story of India.

Currently Nifty(Sensex) are at 4008(13263).
Technically, we have important support at 3790(12500).

Short term traders remain cautious as many of the stocks are poised at their long term trendline and they could tumble down for a long term. Even the medium term outlook for Reliance has turned negative.
Long term investors may go on selective buying spree on a dip below 3790(12500).

GOLD
It seems to have resumed its uptrend and breached upper resistance at $850. It is being suggested by many economic advisers as a safe haven for investors in the long term. But a wait is suggested and let it cool down, rather than jump in today itself.