Bull Markets Roll, Bear Markets Spike

There is an old saying that “bull markets roll, but bear markets spike.”

In a bull market, most investors are long-only. They are happy, The bull market thus “rolls” along, as more bullish investment capital flows into the market and positions are added to.

In a bear market the case is different. Very few people are ready to go short. So many people are angry. The result is a spiky profile where declines are interrupted by surprisingly vicious rallies of short duration.

These mini-rallies are made more vicious by the forced activity of “short covering,” in which bearish traders get “squeezed” out of their positions by the fighting spirit of the bulls.

Nifty update

The trend in Nifty is now changed to UP...yesterday it closed above 4950...which has made the trend up

Traders can look for a dip to enter and be long as long as Nifty remains above 4950

Attention Bears: UK's budget deficit same as Greece

At slightly more than 12 per cent of gross domestic product Britain's budget deficit is the same as Greece's.
Short sellers that have profited from the Euro are now taking huge bets on the pound, which is already down 8 percent this year against the dollar.

The entire story can be read here:

http://www.theglobeandmail.com/report-on-business/economy/short-sellers-take-aim-at-pound/article1486002/

Euro and hedge funds

Hedge funds are taking big bets for the crash of the Euro. We might be in the middle of something big. Like how the pound crashed in 1992 courtesy George Soros

The entire article can be read here:

http://online.wsj.com/article/SB10001424052748703795004575087741848074392.html?mod=rss_whats_news_us_business&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+wsj%2Fxml%2Frss%2F3_7014+%28WSJ.com%3A+US+Business%29&utm_content=Google+International

What US recovery?

Banking: lending is down which is bad. The FDIC is almost bankrupt. Who will bailout the FDIC?

Consumer confidence: The Conference Board numbers for February is 46 (around 100 is a good number). The present situation subindex fell to 19.4, the lowest level since February 1983.

Employment umbers: still very bad...jobless claims is almost 500,000

housing industry: mortgage applications for home purchases have just fallen to a 13-year low. New home sales in the U.S. fell to the lowest level on record in January. Freddie is still losing tonnes of money all backed by the government



The entire article can be read here:
http://seekingalpha.com/article/190665-recent-stats-indicate-u-s-economic-recovery-was-an-illusion?source=email

Managed futures gaining popularity

Managed futures as part of overall asset allocation is gaining popularity

A very good article can be read here:


http://www.nytimes.com/2010/02/27/your-money/27money.html

4950 resistance still holding on Nifty

Nifty is vey volatile these days...gap up one day followed by gap down the next day...VIX which is an indicator of fear is currently above 31...

4950 is still holding as resistance...my overall view is still bearish...a close for 2 consecutive days above 4950 would change my view to bullish

The next few days could be extremely volatile