Today was that typical day when one needed to take a break from the markets and sit on the fence. But for people who get their daily rush of adrenalin from intra day trades this was next to impossible to do. I don’t know if they did any fruitful trades or not, but yes with the volatility we witnessed it sure must have provided the excitement,if not the money. Today move in Nifty was more on a subdued note; it was more of like how to spend five and a half hours. With US FED meet today the majority wanted to stay on the sidelines and take a fresh look at the markets from Monday onwards. Nobody likes the idea of getting caught in the wrong foot just prior to this important meet. Can Bernake do a Reddy? This was an interesting message I received during the day regarding the possible reactions to the FED meet today;
- If the Fed cuts 25 bps and talks about an end to the credit crisis, expect a boom in global stocks.
- If the Fed cuts 25 bps and talks about inflation-management, expect stocks to drop.
- If the Fed cuts 50 bps...That would be an indication that "problems" haven't yet gone away. Expect global stocks to fall.
- If the Fed give hints that they'll soon stop cutting and will also think about the next logical step: A hike...Expect a rise in all stocks markets.
Looking at the daily charts we find nothing major has changed yet, in fact as suggested earlier, we seem to have tested the 200 DMA and found it so far holding! Any major impact of the Dow we will again miss out tomorrow as we are closed. So the action shifts to Friday, which will be pretty interesting to witness.
"Move out of your comfort zone. You can only grow if you are willing to feel awkward and uncomfortable when you try something new."