Are the Bad days coming back???

US Jobless claims higher, are any more bad news on the way??? Was my last articles name……..

The bad days will be back again in the Global markets. Euro has temporarily bounced back but the changes of Euro zone going bankrupt has not been phased out. No change in the US jobless claims indicates that there has been no change in the US markets.

Chicago Federal Reserve Bank President Charles Evan said the risks of a double-dip US recession have risen in the last six months. While he added he did not think that was the most likely scenario, he said high unemployment and a fractured housing sector would make the recovery a fragile one. Asian stocks fell on Wednesday, with Japan's Nikkei at a 16-month low, as investors sold riskier assets after a spate of worrying US economic data, while the yen slipped from a 15-year high on a report Tokyo was considering weakening its currency. But even if Japan's government acted alone to try and halt yen strength, dealers were skeptical it could reverse the growing unwillingness among investors to take risks that has underlined the yen's 10 per cent rise against the dollar so far this year.

The US housing market is taking a turn for the worse.

Tuesday's report from the National Association of Realtors about sales of previously occupied homes is expected to show sales plunged in July. Economists are predicting as much as a 26 percent drop from a month earlier to a seasonally adjusted annual rate of 3.95 million. That would be the worst month for sales in more than a decade.

Many say the market is hurting because buyers and sellers are in a standoff over home prices. Sellers have unrealistic expectations about their home values and are listing properties on the high end.

The Japanese Nikkei was down 1.66%, on reports of its export growth slowing for a fifth month in July and the appreciating yen against the dollar. It had touched a new 15 year high and that caused some panic amongst the investment community as a siring yen is detrimental to the export oriented Japanese economy.

Buyers are afraid home prices will start falling after being flat nationally for about a year and even rising in some parts of the country. The housing market is also being hampered by a weakening economic recovery. Unemployment remains stuck at 9.5 percent and many prospective buyers worry they might not have a job to pay the mortgage. Prices are low, but that's largely because foreclosures are running about 10 times higher than before the housing bust. And while mortgage rates are at the lowest levels in decades, many people can't qualify because banks are being selective in the tough economy.

Major Indices closed down nearly1.7% each. Midcap and Smallcap Indices also tanked this week, loosing nearly 2% each. Name whatever group, it crashed this week. Except the Oil refining companies surged ahead and out perform the Major Indices. Bpcl & Ongc were up by 12% & 5% each. Banks and the Infra stocks had their bad week on the street. Hdfc Bank tanked nearly 3.4% and Icici bank & Kotak bank corrected 3.2% & 2.5% each.

Some of the midcap stocks outperformed the markets. Indswift Lab surged 35% while Surya Pharma was up 30%. Natco Pharm stock was up 16%. India witness above average rainfall in this season, this might be the reason for which major small cap and Midcap fertilizers could see some good rally.

Markets remained very volatile for the week. Nifty made its new 52 week high but ended up with sharp correction and triggered its lower trendline also. Nifty at the close of the week made an intraweek high and low of 5549 & 5391. Last week’s recommendation (Nifty for the upward movement need to close above the 5490 levels). I had mentioned that the Nifty if triggers the lower trendline then we might see some serious correction.

(But if the Nifty close below the trendline we might see serious correction). Nifty on Friday closed below its 20DMA and took support at its 50 DMA.

I had also mentioned that the (“Any bad news in the Global markets can prove to be a salvage point for the Indian markets. Stay cautious; don’t take much open position in the market. Intraday trades are advised.”). There is not such bad news in the Indian markets except the growing inflation and the corruption. Indians are used to corruption and for govt has promised to get control over the inflation within 3 months, irrespective of actual prices coming down, the inflation index will surely come down. HAHAHA.

In the last week RSI had take support at the trendline but triggered the downtrend and continued to fall. MACD also showed negative divergence. Nifty will find support at 5375 -5350 levels.

This weeks call

Short Abb below 757. SL 775.

Buy Zee Ent with SL of 290.

Short Unitech below 77 with SL of 80.

Short Tech Mahindra below 654 with SL of 668.

Buy Tata steel close above 513.

Short Tata Power tgt 1200

Short Sbi below 2785. SL of 2780