Pre Market Report, September 04, 2015 | Stocks and Commodities

September 04, 2015
Time: 8.45 am

Pre Market Report:

1. US markets ended mixed, Dow erased 200 points gain made in the morning.
2. That is mainly due to the fact that Jobs Data will be out before markets open today in US.
3. So Asian markets are following US, most markets are down.
4. Yesterday Nifty was up by 100 points, yet the call option premiums did not move higher.
5. This shows that market feel that the rise in Nifty was just a short covering and markets are not likely to move higher.
6. In fact the premiums of call options of strikes 8200 and above fell.
7. VIX has crashed by 10% and that is a positive news for option sellers.
8. But the VIX is likely to shoot up again towards the end of the day.
9. VIX moved higher in the last hour of last Friday.
10. No need to say about today, we have a huge news today evening. On Monday we are likely to open gap up or gap down significantly.
11. SGX Nifty is trading below 7800.
12. Yesterday I mentioned resistance at 7820, Nifty was trading around that figure for sometime, then the news came that SP was walking out of opposition coalition in Bihar boosting BJP prospects in the election. Then further short covering set in.
13. Though SGX Nifty is trading below 7800, delivery based buying of more than Rs 200 crore exach in Axis bank, ICICI Bank and HDFC may limit the downside in Bank Nifty.
14. Nifty is expected to trade in the range 7780 and 7820 and there will be some sharp move towards the end of the day.
15. The sharp move may be on the downside as most of the shorts would have been covered in yesterday's rally.
16. FIIs have sold in August, more than what they have sold even in 2008 crash. In September also, they continue to sell, no matter what the Nifty level.
17. Yesterday FIIs have sold for about 400 crores.
18. All these show one thing, whether markets go down or not, upside is limited.
19. We have two huge uncertainties in this month, one today evening jobs data, second Fed policy on September 17.
20. Markets are likely to stabilise after these two events only.
21. Until then, markets are likely to be highly volatile.