The DOW is down 3%, or 344 points, in a pretty lousy day. The rupee is trading at 44.55 and looking weak. Inflation was declared at 12.34% – a very high value, which will definitely be #1 on the list of to-do’s of the new RBI governor today.
The outlook is weak, and while we may open lower, I have a strong feeling we’ll cover the gap very fast. If that happens, all bets are off, and we could have an immediate bear market rally that takes us above 4600. So don’t panic.
Note however that as my longer term goal is down – this is just a trading note for today. I think our series of bad news is yet to come – on inflation post rupee depreciation, on a complete destruction of the growth story post diwali. I would not be long the Bank Index at this point. (Pharma yes, FMCG selectively, Auto perhaps, and it seems to be a good time to go long IT, but I’m still waiting)
Is it time to set up a short? I don’t know – but I think today will determine it. If so, you’ll see some entries in the Short Only strategy, for sure.
