Tag Archives: Crash Setup. 1994 Mexico Economic Crisis

INDIA NIFTY – Has 5400/5420 in view. This guy is not falling!

The last few sessions in the markets have been breath taking, Just a few days ago on FRIDAY, HOPIUM rose and the markets became once again happy go lucky!. Despite the geo political arena getting hotter, American Ships in the straits of Hormuz, plus IRAN completing their war cry exercise and demonstrating its war capability, and selectively saying, “Don’t mess with me, I have the fire power”, its possible, the USA now discounts the IRANIANS for all their empty threats.

Last year IRAN warned “No ships shall pass my seas” and a US SHIP turned back and headed further away, with that, IRAN said “IF YOU COME THIS WAY AGAIN!, I SHALL TAKE CARE OF U!.  A week later, when the SHIP returned, IRAN did nothing.

A whole lot of empty promises and lack of management displinary skills of IRANs arm forces, indeed raises many doubts, but then again, they have shown more than once, their inefficiencies, an example how they were not able to handle the naughty behavior of STUXNET or when their mililary depots blew up, due to “improperly of storage weapons” techniques.

A whole lot of questions are always raised, when it comes to IRAN, the sabre rattling has started to become boring, this could be the underestimation both parties could make, leading up to the escalation in world war three.

The USA may just push it further and strangle the IRANIAN even more, before the IRANIANS make the first move, due to fear attack.

indeed escalate world war 3, and the IRANIANS will indeed give them a tough fight, which will solve USA’s economic problems and the Industrial War Complex will once again have their way.

 

Incoming search terms:

  • biggest building
  • hong kong tallest building
  • tallest building in london
  • biggest buildings
  • tallest thing in the world
  • biggest tower
  • world biggest building
  • worlds biggest building
  • london tallest buildings
  • tall buildings in london

Bearish forces at work!. Nifty 4500 on the cards?

Last year in Jan, near about 6300 on the Nifty, We advised a short, prior to doing so, our team visited Mumbai, saw the construction all over, saw the folly of the richest man in India with his tall billion dollar building as his home, and witnessed the hope in the AIR, “India Shining”. All this presented a peak for the markets.

Efficiency in India is non present and as the euphoria of cheap money nears its end, Indians slowly realize the days of cheap money is over. In Economics its hard to see, how growth can be delivered by cheaper code writers that India Offers, or how this country could sustain itself on a global scale, from self sufficiency the country today is a net importer, its deficits are evidence on the Indian Rupee.

So after this trip on the day out, at the airport departure terminal, we headed to the smoking room of the airport. In Airports smoking room’s, usually tips can be obtained on how the country looks in the eyes of departing travelers and more often than not, it’s a worthy observation. A gentleman travelling back to the middle east asked us what we did. And we highlighted we made a quick study of the situation on the ground and believe that the up move of India is over, {we were short, a good size at 6000 areas}!.

This gentleman quickly became agitated and highlighted how the whole world was in Shit, including the middle east and how India will rise up to become a super power in the years ahead. We held back and gave him a grin and walked away. If it acts like a duck, quacks like a duck, then it is a duck.

Now if indeed we are right, how will it play out!

The debt exposures of the government and corporate’s, which is hurting, especially those who borrowed FCCB’s and in various foreign instruments will come to roost, devaluing the Indian Rupee even further, technically our charts indicate the region of 62-64 before any meaningful correction on the INR, while on the first phrase of devaluation the noise from government officials and verbal interventions will provide initial level support to the currency, but verbal interventions can only do so much.

Once additional momentum picks up to the downside and political dissents ramp up their voice on inflationary pressures, the stock markets will start to recognize and high frequency bots will be unable to continue providing the fake liquidity that is currently present, propping up markets is a strategy and belief shared by greenspan and bernanke, they believe higher stock valuations, provide a feel good factor and eventually reflect the true extend of the economy, this is indeed false.

India’s RBI governor is also trying to act like them too, which will make Inflation easily accessible.

Their theory is flawed, it doesnt reflect anything near the true extend of the economy, in reality the economy is suffering, real estate values are held up as in stocks, due to the weaker rupee, which effectively makes the nifty trading at 4000 levels in real value terms, since the INR is almost 20% weaker than before.

Does anyone think, The same level of security and safe keeping as in gold, real estate or any other asset class that holds it value, than fiat currencies and shares will be in for a surprise.

The situation on the ground today is amplified ten times than 1991, as growth levels expanded to the upside, similarly their corrections and problems are also amplified. For those, who want to know better, are advised to take a look at Malaysia, Thailand, and Singapore (1997-2002) stock market charts vs Fx devaluations to reach their own conclusions on India.

Crash Setup Big Swings Up and Down Outside…

Crash Setup.
Big Swings, Up and Down.{Outside of the normal range}
Expansion of Volatility.
Sideways Grinding Markets, Thin Volume.
Then quite before the storm.{Typical in current year end months}
Then comes the break, to the downside {surprise and fear}.

Previous Scenarios: http://en.wikipedia.org/wiki/1994_economic_crisis_in_Mexico