Posted By : Kishore B.S
Today the market showed a lot of strength by holding the 5310 level and closing above the 50 day sma. In spite of this the sign is bearish. On the global front a lot of bad news is coming. We were taking from so many days about Italy, Greece, Portugal etc. Suddenly a new nation has joined the race of debt ridden nations and that is Spain. The budget of Spain and the economic data confirmed that the nation is in a recession. The economic data of the European nations also did not come out good. Now Spain and Portugal have to auction their bonds today. The markets will have a keen eye as to how investors react to these sales. Today ECB is going to issue its statement. It is expected to keep the interest rates at the same level.
The US was showing signs of strength but the Fed spoiled the party by giving out a statement that the monetary policy could be tightened in near future as the economy is recovering. If we see closely cracks are starting to appear in the economy all over the world.
Now as a rule everyone should have squared of all the positions today. This is a very long weekend. The markets will be closed for 4 days. Of course the signs are bearish but 4 days is a long time. A lot of , positive or negative can come in these days. So, none knows how the markets will react on Monday. SO, the wise decision would have been to stay out of the market and start afresh on Monday. That said Indian markets showed a lot of support today.It might be because of the 4 day holidays. Everyone was just trying to stay out of the market. US payroll data is to be released on Friday. That will give a direction to the markets on Monday.
(Inputs: Mr. Shubham Deva, An associate of Stock Market Institute, IIT Kanpur)