==>>US markets trembles

BOA bought Merrill Lynch for $50bn. Lehman filled for bankruptcy. AIG may go either way on Monday, it was denying buyout offers & instead, seeking a $bn cash infusion. The take over of the Merrill leaves two large independent investment banks in America, i.e Morgan Stanley and Goldman Sachs. According to me both will also come with more losses in their Balance Sheet. Accoridng to the Bond traders, "Morgan" could be the next target. (If this happens then the America is heading towards a Great Depression as seen in 1929.) In the last 1 week there has been 3-4 bad news rulling the American markets. Just after then news of Frannie & Freddie taken over by US govt, Lehman collapsed and now Merrill lynch. I think so there could be more bad news just waiting to blast like a volcano.

Nymex crude plunged to $90. Rupee has further shown weakness against dollar. Rupee nearing 47 agianst 1 dollar.For Rupee depreciating the blame could be on the illegal overseas NDF( non-deliverable forward markets. Its illegal coz they are not sanctioned by the RBI. A NDF is a non -deliverable forward contracts in which buys forward dollars (book dollars today for deliver at a specified future date) in the local market for their clients and sell equivalent dollars abroad or viceversa, so that on the delivery date they make a profit or loss, which is the difference between both the rates.

Yesterday Nifty closed at 61% retracement level from the low of 3790 and high of 4620. Today markets opened with a downward gap. but in the closing bell both Sensex & Nifty bounced back. Nifty recovered around 150-160 points and Sensex around 500 points. Technically speaking Nifty daily price chart has some indicators that shows that we might see some bounce back form the current levels. "Hammer" pattern is been made in the both teh Sensex and Nifty chart. In the last 2 days there has been a gap down in the Sensex. it may bounce back to fill up these gaps.

In the last few blogs i have been informing the readers of this blog that the Banking & real estate sectors will the be the worst sector to perform if the market comes down. America could see recesssion. Till now the all the global markets have been following the US markets, but according to me now the emerging markets could see some divergance and could outperform US markets. In the near term i dont see a fast recovery but surely the Indian markets will outperform US markets. Nifty has a good support at 4000 - 3950 levels.