Pre Market Report, September 3, 2015 | Stocks and Commodities

September 3, 2015
Time: 8.45 am

Pre Market Report:

1. I was away for the last few days so I could not write the reports.
2. Markets are in a highly volatile zone with VIX is hovering above 25.
3. In this kind of markets, trading will be very difficult and markets will move in a highly unpredictable manner.
4. For example, yesterday, Nifty went up to 7875 then fell to 7795, then shot up to 7860 and then fell to 7720. A total swing of about 400 points.
5. Bank Nifty fell 500 points intraday after a fall of 700 points intraday the day before.
6. Yesterday US markets rose but SGX Nifty is not even showing 20 points move.
7. Also a significant news is that the difference between FII selling figure and DII buying figure was so wide yesterday.
8. FIIs have sold more than Rs 1700 crore whereas DIIs have bought only about Rs 800 crore. Usually DIIs match the FII selling, but yesterday it was significantly lower.
9. That is the reason why our markets not looking to move up though US and other Asian markets are doing well.
10. China markets will be closed today and tomorrow.
11. Yesterday's ADP Non Farm Payroll data came at 190000 compared to the expected figure of 201000. But these things are immaterial now.
12. US will either increase the rate by September or surely they will indicate that they will raise it in December. Whichever happens, that is not good for Emerging markets.
13. Any intraday bounce should be used to lighten the position or should crate short positions.
14. Traders are advised to keep only pair trades (For example long in  Nifty and short in Bank Nifty)
15. Or should choose the options route to trade instead of Futures. Buying of options carry limited risk though chances of making money is less.
16. If the markets trade firm in the first 45 minutes, then VIX will fall further.
17. One should survive in this market as this is the most difficult market after 2008 crash.
18. Many of my clients have gone bankrupt. 
19. Hedge Funds all over the world are bleeding. Hedge funds in China faced losses that was not seen in the last 17 years.
20. It is very difficult to go short at this stage as markets are in oversold territory. Any coordinate action by central banks like what they did in 2008, will bring short covering rally.
21. So trade with caution, Nifty is expected to trade between 7665 and 7820.