How will be the crude oil prices in the months to come?

How will be the crude oil prices in the months to come?
The crude oil prices which was hovering around 12 to 15 dollars in 1998 has started the rally from that level towards 145 USD in 2008. A correction was set from that level.



Before the end of 2008, it tested USD 30 region and bounced back towards 80 USD. Since then it is trading in the region between USD60 and USD80.


Technically every Markets peaked in 2008 except Gold. Crude oil also peaked in 2008. The peak of Crude Oil was coincided with the start of recession in all global Economies. The demand for Energy was slowed by the slowing down of global economies. So the prices of crude oil stabilized around 70 USD in 2009.


Unless the Global Economies start showing growth the demand for Crude oil is more less would be the same. There would not be significant increase in the demand.


No Economic cycle shows fast decline followed by immediate growth. It will surely take to start the next cycles, which means we are likely to see some more years of downtrend.


Until then, we can be sure that oil prices would move above the 80 Dollars mark in the near future. Technically also, any which corrects itself more than one third will see a severe bear market. So, crude oil prices are likely remain in a range below USD 80 for few more years.


I may not be astonished in seeing Crude below USD30 in another 2 years.

Will the downtrend in Gold continue?

Will the downtrend in Gold continue?

After testing a high of 1226 USD Gold has reacted from that high to test a recent low of 1100. A 126 USD decline is a significant decline from the high. Such a decline in the past 6 months was not seen.
Previously I have been advocating that we are developing a ‘Gold Bubble’ and it about to burst. Will this decline foretell the end of the bull Market in Gold.
One of the famous tools used by Analyst to forecast free Markets is Elliott Wave Principle. Based on the study using that tool, it points we are in the fifth wave of a impulse, which means we are in the last leg of the bull Market.
According to the theory, If this is going to be the last leg of the bull Market, then we are going to see a big decline for another few years to come.
Ok, If 1226 is not the top, then what will be the Maximum target for Gold. Yes, based on Elliott Wave principle, we can derive a target of 1400 USD in another 6 months period.
Whenever a commodity is largely discussed in Media, then that would mark the significant turning point of that Market. Gold is being discussed in all world media and it is the only commodity which is in limelight for the past one Year.
Last when Crude oil Prices were peaking, the same story happened. Media covered Crude oil daily and their focus was on Crude oil with analysts predicting 200 to 250 USD as price Target.
Now, the same thing is happening in Gold.
Let us wait and see whether History repeats itself……………..

TRADING TIMING CHANGE , THE REASON BEHIND IT

SHARE MARKET TIMING CHANGE , THE REASON BEHIND IT

The ego battle between India’s two exchanges comes to a permanent halt.  Bombay stock exchange advanced its timing by ten minutes, reacting sharply to it National stock exchange advanced its time by 55 minutes to 9 A.M.  As there is no other option the Bombay stock exchange also announced opening at the same time.  There is so many mixed reactions in the market most of the peoples object this arbitrary move.

The original move was to check the foreign fund managers using the Singapore market to beat the Nifty by short selling the Nifty futures options over the Singapore market.  Even now also they could not resolve this problem, why because the Singapore is still open well ahead of our revised timings.

Before this revision the BSE will set bench mark prices because by that time NSE may remain closed and hence the BSE will set bench mark prices.  But now the NSE will lose this opportunity.

But there is so many operational hardships are there.  The banks will not open that much earlier hence arranging funds will be a problem other than the strain on their daily routine.

Most of the peoples related to this field oppose this arbitrary move and they feel that they should be consulted before taking this move.

Economic Growth and Social unrest.

Economic Growth and Social unrest.

The Economic growth of a Country is interrelated to the peaceful social conditions of a Country. A social harmony in a country would automatically turns into a peaceful Business atmosphere.
A peaceful and harmonial social environment of a Country would attract foreign Investors to invest in their country. Local businessmen would be doing business peacefully which in turn would put the Economy in growth path.
One best example of Social harmony is important for Economic growth is, India and Pakistan. Though India and Pakistan were in the same plain in the 1990s, India turned out to be big Economic Power by 2008.
The reason is the social unrest in the country had put the economic development into the backseat. Frequent bombings, Killing of Political figures, hate campaign against the westerners has presented a poor picture on that Country.
That has dithered away potential Foreign Investments from that Country. On contrary, India which is having a vibrant democracy and rule of the law has grew leaps and bounds.
When comparing India with China, we say the growth of China is better than India because of this Social harmony factor. Even though our environment is much more better than Pakistan, it is not better than China.
In India, we had frequent terrorist attacks, bombings and political unrest. But in China, there is no such incidents taking place. That is why the growth rate is higher for China than India.
If a country wants to grow Economically, then it surely should have a peaceful social atmosphere.

Which is going to be the next Bear Factor?

Which is going to be the next Bear Factor?

The late 1980s bear market in the world Stock Markets were fuelled by the Gulf war and failure of East Asian Economies like Malaysia, Singapore, Hong Kong and etc. The bear market sustained till 1998.
The early 2000s bear market was fuelled by the dotcom bubble burst and also by the terrorist attack on WTC in USA. Then it terminated only on 2003.
The 2008 bear market was fuelled by real estate bubble, which impacted heavily the USA and also the World Economies. Since then it has pared some of it losses but still vulnerable for another bear attack.
If so, then which is going to be the biggest factor for the next bear market. May be it is real estate itself. As I believe the real impact of the real estate bubble is yet to be felt.
Another possible factor could be a Gold asset Bubble. Peaking Gold prices would lead to Bubble in days to come.
Let us wait and see…

Economy and Stock Markets

Economy and Stock Markets

Are Economic growth and Stock Markets are interrelated. Half of the economists will say ‘Yes’ and half of them will say ‘No’.
According to me it is ‘Yes’. Stock Markets and Economic growth are interrelated because the rise of Stock Markets would attract small investors into the Market which will propel the stock Markets further, which in turn fuel the start of new companies and projects, which in turn help grow Economy.
A rising Stock Market would invite retail Investors and Foreign Investors to invest in the Stock Markets through secondary Markets and also through Initial Public offerrings. This process will infuse huge amount of idle money into the system
The money that came for circulation would be used by the companies to expand, backwared integrate and forward integrate. Thus the production capacities of all companies increases, so they produce more end products.
These end products has to be sold and this will be done by exploring new Markets locally or internationly. Thus the earnings of the companies will increase, which in turn means increased tax for Governments.
Thus a rising stock Market will surely propel a Economic growth.

GLOBAL INDUSTRY DOWN TURN A BOON TO THE CHINESE AUTO INDUSTRIES!!!!!!!!!

GLOBAL INDUSTRY DOWN TURN A BOON TO THE CHINESE AUTO INDUSTRIES!!!!!!!!!

The global industry down turn is a double bonanza for the Chinese leading automobile industries. The fast growing Chinese industries are chasing western brands to utilize the steep global industrial down turn.
Beijing  Automotive Industry Holding(BASIC) is one of the largest auto maker in China.  Recently Beijing automotive industry holding acquired Saab unit a part of General Motors  as a part of developing its own cars. More over it will by the intellectual property for 9-5 and 9-3  sedans and other equipments for a huge  unspecified sum.

This deal will help in the new saap production , but the Saap people clearly informed that the deal will not affect the sale of Saab to others.

The Dutch sports and ;luxury car maker SKYPER is also holding talks with general motors for Saab. Not only SKYPER and BASIC  there are so many other automobile manufactures like GEELY automobile groups are running behind the western car manufactures to harvest the benefits of Global industry down turn.

Most of the Chinese Auto mobile industries are running behind VOLKSWAGEN, TOYOTA MOTORS for tie ups .

Acquiring some assets of GM by BASIC  us a boon to the Chinese  company. Though it is a fifth largest automobile maker in china,
It still does not have its own brand car. Hence, even though the Saab platform is old still it  can use it for manufacture its own cars in future. More over it will get support from Saab as it will use the acquired technology in production of its own cars.

THE DUBAI CRISIS!!

THE DUBAI CRISIS!!

The announcement of Dubai world seeking a stand still in debt servicing clearly indicates, that the Global financial crisis is not yet over.

 The economy of Dubai had relied on the massive borrowings. It build the economy mostly on trade,reality and tourism. Moreover Dubai invested largely in foreign assets such as Casinos luxury hotels. Ocean liners, properties  etc. Its economy is substantially financed by international borrowing.

In 2007   global financial melt down hit its growth, trade and tourism very hardly, resulting in entire collapse of commercial trade abandoned construction projects,unoccupied  commercial complexes, which lead the property prizes to tumbled down to its bottom.

At this juncture servicing the huge debts raised to create these assets became difficult. The Dubai world one of the government owned company owing nearly $60 billion to international banks asked for a  stand still as regards debt servicing from its borrowers for six months since late November.

Here it is very important to discuss how this same crisis was handled by both US and Dubai. In US the capitalistic country several private banks, including investment banks have been bailed out of with large dose of public or other wise  taxpayers money. But in Dubai the international lenders to the government owned entities have been left alone to handle the massive credit related problems. In Dubai government  entities are substantially in excess of the GDP of the country hence it considered a sovereign risk in the conventional sense of the term.

 The international banks which lend to Dubai world are in no financial position to take even a partial write down on these assets. It is now certain that the process of cleaning up bad debts and recapitalising them.

After the Dubai world travails, the international credit market unlikely to offer government owned corporates without  an explicit sovereign guarantee .

Which is the long term Investment bet? Deposits,Gold, Stocks or Real estate?

Which is the long term Investment bet? Deposits,Gold, Stocks or Real estate?
During the 20^th century, investments in the real estate showed steady returns. Sometimes the price rise is fast and sometimes it is slow. But the rate of return is some what better than the Fixed deposits and also above Gold. But is somewhat riskier than fixed deposits.
Likewise, Investments in the Gold also showed good returns and at times it is stagnant. It sometimes performed better than fixed deposits and at times it is under performed when compared to fixed deposits. But is riskier than fixed deposits.
Investments in the Stocks is the riskiest of these investments. But the returns were phenomenal during the Bull Market and it showed negative growth in bear markets. But on Average, it performed better than other investment avenues. But the risk factor is much more in Stocks.
My investment plan would be to invest 30% in Stocks, 30% in Real estate, 20% in deposits and 20% in Gold. Any investment plan should take into consideration atleast 5 years time frame. And the best way to invest is to invest at bear markets.

How Interest rates affect the Stock Market?

How Interest rates affect the Stock Market?

Interest rates are the percentage at which the Lenders lend the money to creditors. The lenders may be Banks or Individuals or Financial Intstitutions. The creditor may be any one.
But here, the Interest rates we are talking about is the rate at which a central bank or federal bank of any country lends the money to other banks. In USA, the central bank is Federal Reserve and in India, it is Reserve Bank of India.
Central Banks world over lends money to other Banks of their country. The Interest rate at which it is being given to the Banks really matters. If there is inflation, in order reduce the price rise, Central banks increase their lending rates in order to reduce the flow of money in to the system. This in turn reduce the price rise.
And in times of deflation ( prices decline steadily ), Central banks reduce the lending rates to inject money in to the system.

If interest rates are hiked, then the Banks will increase their lending rates and the Industry which is financed by Banks will get affected by the rising interest cost. Thus it affects the bottomline of the Company.
Since companies bottomlines are affected by rising Interest cost, their earnings will be affected which in turn affect the sentiments of the stock Market, which in turn affect the stock prices of the companies.

Fundamental Analysis of a Stock

Fundamental Analysis is the way of analysis of security based on their internal and actual performance of Company unlike Technical Analysis in which just the movement of prices is studied, without considering the fundamentals of the company




Fundamental analysis of a security is the study of Balance sheets, Profit or Loss account, assets and liabilities, sales income, other income, interest payment and etc.


Based on this an Analyst comes a conclusion about the future of the stock or the Company.


Some of the main value they see are PE ratio, EPS and Book value.


PE ratio is the ratio between Price of the Stock at the Market to the earning of the stock per share. Higher it is, the stock price is highly valued. If it is less, then the stock price is priced low.


EPS denotes Earnings per Share. It is the ratio of profits made for the year to the number of shares of the company. If the value is high, it means the earnings are high for the company and if it is low, then the earnings of the company is low.


Growing sales figure or slowing sales figure would influence the future performance of a company.


An analyst also see the performance of the sector at which a particular belongs to. They analyze the performance of the company with the sector’s performance. And also they see the future for the that sector.


Various factors like this influence the movement of the price of a particular stock. Study of this factors is Fundamental Analysis.

Technical Analysis Introduction-2

In latter years , in the course of market history many analyst propounded their own theory, and new indicators are introduced .Many indicators based on momentum have become popular nowadays .

Japanese candlestick techniques are used along traditional western charting techniques.

The price of a security represents a agreement between a buyer and seller. It is the price at which the buyer decides to buy and the seller decides to sell.


If he expects the price to move up, he will buy it. If the investor expects the price to move down, then he will sell it.

Humans as a individual, are not easily predictable. But as a crowd their behavior is predictable. A individual as a member of a crowd would behave differently.


Because of the participation of people of various emotions, anticipation and expectation, the market movement is unpredictable. Because of this there is always a gap between demand and supply which makes the prices to swing constantly .

Technical analysis, in other words is the study of this demand and supply ,and anticipate price changes.

Technical Analysis Introduction-1

Technical Analysis is the art of analyzing a stock's historical prices in an effort to forecast the probable future prices. It is done by studying and comparing current price movement, with the help of tools like (i.e prices ,volume ,speed ,pattern and time) ,with the past price action to predict future course of the price action.

To put it simply, technical analysis is the study of prices, with price,pattern, volume and time as being the primary tool. it is applicable to stocks, commodities and currencies.



With the help of Technical Analysis we can predict the prices from days to several years . It can be applied at the time of both purchasing and selling.

Technical Analysis is useful for improving the investment decision making skill Before making investment decision technical analysis should be supplemented with fundamental analysis


Concepts and tools of technical analysis were developed several centuries ago. Japanese used candlestick trading techniques for rice trading in 16th century itself .

These tools are well tested since then and all over the world investors are using it successfully .

The traditional technical analysis method got a boost after the Dow Theory, developed by Charles Dow in 1900. So he is also called the father of modern technical analysis.

Since then many theories are propounded by many people based on Dow theory or based on price pattern (ie Elliott Wave Theory and Neowave ) or based on Momentum of the Market.


..........to be continued in Part 2.......

Is the Bear Market over Worldover?

January 2008 saw the start of a bloody decline in stock markets World over and it terminated the bull run in the stock markets that started on 2003. The decline continued till  october2008 in most of the Asian Markets and the decline terminated around february in US and European Markets.



People ranging from ordinary men to investors in the stock market panicked and the period saw many layoffs in all sectors of the Economy. Unemployment rose in US and world over. The severely affected country was USA.


Many Banks and Financial Institutions in USA went bankrupt mainly because of sub prime crisis which is due to the burst of real estate bubble and Stock Market decline. The tremors are felt heavily in European countries and it is felt mildly in Asian Economies. It was said at that time, that World was going to face the worst bear market.


Ever since that, Governments offered stimulus packages to boost their respective countries economies. The stock Market were recovered from the lows very quickly. Now, everybody saying that the bear market is over. The stimulus packages given by their governments boosted the economy and everything is normal today.


But My opinion is, even though Stock Markets have rallied for the past 9 months, the present rally seems to be temprory.


No bear market completes its term in just 9 months. So, the real and the worst bear market is yet to come. It may take another five or six years to complete. Hisotry will always repeat itself.


Be prepared for it.

Will be US Dollar replaced by Euro or Chinese currency?

For the past six months Dollar has been depreciating against all major currencies. Against Indian Rupee it depreciated from 52 to 46 Rupees. It depreciated against Euro and it depreciated against Major Asian currencies.

There is already a talk among certain coutries like Russia, China, France and etc, to replace US Dollar as World Reserve Currency. They want to trade oil in some other currencies except USD.

The US Economy is growing at a very slower pace for the past ten years when compared to the other Major developing Countries like China and India. The growth rate is likely to be slow for another 5 years in USA.

Even the once mighty Europeon Countries are no longer growing as Asian Countries. The continueous lesser growth or no growth in US and Europeon Economy would surely put China in the Drivers seat in world affairs and World Economy.

The Chinese growth in the past decade is phenomenal. It is vast a country and it is almost equal to the size of USA. Its population is more than 4 times the population of US and their only disadvantage is English, the language spoken and understood in most part of world. Even in that area, they are improving day by day.

Going by the vast potential of Chinese in Military and Economic Might, Chinese currency may replace US Dollar in another  Five or Ten years in the Future.

Sectors for the Next Bull Markets

Sectors for the Next Bull Markets

World over each Bull Market will be lead by any particular sector or any particular set of Sectors of the Industry. The 1990s rally was lead by Old Economy Sectors like Cement, Steel, and Automobiles. The next Bear Market was also lead by the same sectors.

The 2000 rally was supported by ICE sectors. ‘ICE’ shortly denotes Information, Communication, and Enterntainment Sector. The Stock prices of Companies like Microsoft, Apple, Oracle, Adobe, Sun, IBM went to dizzy heights. In India, Infosys, Satyam, Wipro, Hcl Tech are the companies saw a massive bull run.

Zee tv, Himachl Futuristics, Global Tele systems were the stocks from Media and Telecom Sector that are in bull Run.

Globally, Telec om Multinational Companies like AT&T saw bull run in all European Stock Exchanges.

Like wise in the previous Bear Market, the same sectors which lead the bull rally, lead the next Bear Market.

The Bull Rally that started in 2003 Globally, is supported by Power, Infra, and Reality Sectors. Globally, the companies in this sector was in demand in all Stock Exchanges.  Like wise, the bear market in 2008 was also lead by these sectors.

So, which sector is going to lead the next bull rally. Technical studies reveal Pharma, FMCG, Financials will lead the next rally Globally in all Stock Markets.

Be prepared for that.

Market Cycles

I have observed that any free markets in the world are behaving cyclically. Careful examination of the time period taken by the market in each legs reveal that they are behaving rythematically.



It seems world Equity markets are moving in 33 year cycle. A new bull market is started in Dow Jones Index in 1950 and it continued for 1983 and the current leg is likely to terminate 2016.


Whenever equity markets are in last phase of a cycle, Bullion markets are behaving in opposite direction of the equity Market. So, Equit Markets are in bull phase if Gold Markets are in bear phase and Gold marekts are in bull phase, when Equity Markets are in bear Phase.


The 1970s Bull Market in the International Equity Markets were lead by Japan. The 1980s and 1990s Bull Market in Equity Markets are lead by south East Asian Countries. The 2000s Bull Market is lead by India and China. So the next bull market is likley to be lead by some other new countries.


The smart Investors should always look for the right Market to invest and the right marktet to withdraw their funds. It will not be profitable for anyone to hold on to their same investments in all period.


Market cycles will help you to time the market at appropriate time. So do study the Market cylces and take investment decisions based on the study for profitable Investments.

Is a Bubble building in Gold?

In Financial Markets, herd mentality is in work. Investors always go by the herd.
Last year, they chased real estate and property prices shoot up world over and investors bought properties as though there is no tomorrow.

So, this effectively set up a stage for impending financial Bubble and that happened. Property prices fell all over the world. Many caught in the melee. Banks went bankrupt. Companies went bankrupt. Individual went bankrupt.

But still, herd mentality is in work. Now, the people are chasing Gold assets and it has effectively set the stage for the next financial Bubble, that is ‘Gold Bubble’.


Financial Bubbles are created when all of the investors who are interested in a particular asset want to get hold of it. Once the buying potential recedes, then a huge selling potential is created. Once prices start coming down, panic selling by all the investors push down the prices beyond its intrinsic value. This is how financial bubbles are burst.


The present price rise in gold reminds me of bubble is being built in it. It is likely to burst in another six months. The same story will happen again. Banks will go bankrupt. Companies will go bankrupt. And individuals will go bankrupt.

Let us see, if this happens shortly.

Is it worth giving Noble peace prize to Obama?

Is it worth giving Noble peace prize to Obama?



Ever before completing one year in office and even before any Major policy change by the US President, the Nobel Committee announced Nobel Peace prize.


Even before he performs, he was given the Nobel prize. I wont argue that he is unfit to get the award, he has all the qualifications to get it. Had he been given the award after 2 or 3 years in office, It would have been appreciated by the all quarters.


Many people of questioning the decision. Many feel it is pre mature and biased. I too astonishe on hearing that. I thought at that time, normally Nobel prize would be given to the achivements already done but here it is given that he will achieve those objectives in future.


Anywhere prizes will not be given for the things that will be done in the future. The awarding of Nobel prize to Obama seems like that. I don’t understand if there is no other person in the world is fit to get that award for this year.


But one thing is sure, as he has got the Nobel peace prize, we would not indulge in further military activities in anywhere in the world. From that angle, I really appreciate the Nobel prize Committee for awarding the prize to Obama.


But in the future, if Noble prizes are given in this manner, then it would surely show Nobel prize as laughing Stock and also it will loose its respect it is command among the people.

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