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Pre - Market Report (16th March 2020)

  1. Violent actions in Stock Markets since Friday morning.
  2. Our markets closed at lower circuit along with Soth Korea and Japan on Friday & during the 45 minutes closure, European and US futures shot up.
  3. Once we began to trade again, markets shot up.
  4. LIC reportedly pumped in large amount of money to support the market & also all Shorts were trapped which led to huge Short covering.
  5. Nifty future fell 1300 points then shot up 1800 points.
  6. Once our markets closed, action began in US markets.
  7. Trump announced Emergency in U.S through which it will help to release lot of money to fight against Corona & Dow ended 10% higher.
  8. Next day, Apple announced closure of all its stores outside China.
  9. Today Morning the biggest surprise came from Fed as Fed cut rates by 1%. It also announced QE of 700 billion and other liquidity measures.
  10. Other G7 countries also seems to be coordinating.
  11. Despite all these measures, US futures fell 5% to hit lower circuit.
  12. But some Asian markets are higher.
  13. Asia is mixed. Japan and South Korea are up while other markets are down.
  14. SGX Nifty is down by 400 points.
  15. I Strongly Believe interest rate cut is not a Long Term Solution to fight Global Pandemic. In the past whenever Emergency rate cuts have happened Stock Markets in the longer run have reacted Negativity to it.
  16. SGX Nifty is totally confused and decided to trade at Thursday's closing level.
  17. Meanwhile, YES Bank restructuring news came as a Shocker.
  18. Those who are holding more than 100 shares, can not sell more than 25% of their holding for next 3 years. So it's like an Fixed Deposit with Zero Value after 3 Years.
  19. These kind of restrictions has never happened in India, not only in India, in entire world.
  20. China Manufacturing data came very bad at minus 13.5%.
  21. But Asian markets seems to have factored in that news.
  22. Markets are not reacting after this news.
  23. FIIs have sold for Rs 6000 plus Crores in Cash market.
  24. Market volatility is here to stay for some more time. VIX has reached 57+ levels.
  25. If you have no positions, best way is to keep away from markets.
  26. Wait for India VIX to fall below 30, to resume Trading.
  27. US cut rates by 50 basis point a week before and another 100 basis point now.
  28. Many other countries also have done that.
  29. Will India do the same? That has been going on in Everybodys mind for the last one week.
  30. Meanwhile, SEBI seems to be considering a Ban on Short selling and Intraday Trading.
  31. But in the past, this kind of measures helped markets to go lower rather than helping it to Stabilise.
  32. Futures of both the Indices have already been Trading at 50-60 points Discount. In Futures you would hardly make few points in Index moves after your Entry
  33. Option Contracts are already trading at huge Premiums because of VIX. So if you expect any extreme Moves buy OTM Call Options.
  34. Friday (March 13) rally of 17% from Lows Shouldn't fool you as a Trader , that was just a recovery rally . Still Everything hasn't not been solved so it remains sell on rally Market.
  35. When I say not to trade in these sort of Markets they don't realise it.
  36. After losing Money they feel guilty and say "that they shouldn't have Traded".
  37. Over the Weekend , I have almost Received 80+ Messages of Traders who have lost Everything & have become Bankrupt. Mostly the Traders trading in Futures. They couldn't square off their Positions when Markets hit Lower Circuit & by the time they Squared off their Positions it was too late.
  38. Others lost Money because of Gambling Mindset & not doing Risk Management.
  39. Do not try any Adventures. Avoid Futures Trading as high Movements are being Witnessed in matter of Seconds. 

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