Pre Market Report, October 1, 2015 | Stocks and Commodities

October 1, 2015
Time: 8.30 am

Pre Market Report:

1. After many trading sessions, all three indices in US, Dow, S&P 500 and Nasdaq, closed significantly higher.
2. SO Asian markets are all positive.
3. SGX Nifty is trading around 8040.
4. Manufacturing PMI from China was slightly better than expected.
5. But both China and Hong Kong markets are closed and hence they will react only tomorrow.
6. ADP Payroll data from US was positive and hence December rate hike is almost sure.
7. Anyway tomorrow Non Farm Payroll data will throw more light on this.
8. Though technically everyone is expecting another bottom, in short term it seems that things have changed to bullish tone.
9. Nifty is opening above 8000 after a long time, we have to see whether Nifty holds above this level.
10. Chances are high that Nifty will close firmly today due to many reasons.
11. One, yesterday I said after a big event like RBI policy, VIX should crash, but it did not fall much.
12. Though VIX did not crash on Tuesday, it crashed by 9% yesterday. That is a very good sign for bulls. Once VIX is down, markets are likely to move in a predictable manner and hence one can take speculative positions.
13. For example, by sensing the positive tone, I went ling in Nifty at yesterday's close, today morning Nifty future is likely to open about 50 points higher and the low VIX helped me to predict the trend. Even if it has gone wrong, Nifty would have fallen 10 or 20 points, the market would have given an opportunity to exit the position. This may not happen when VIX is high.
14. So the first and foremost thing is that VIX has come down.
15. Second, excess positions created due to RBI policy would have gone out of the system as Bank Nifty fell despite more than 100 point rise in Nifty.
16. So the excess optimism is gone, so Bank Nifty is likely to do well today.
17. Third, at the time of our markets close, Europe was trading firmly in Green and US futures were up almost 200 points.
18. Fourth, Nifty future hit Tuesday's high and then profit booking dragged the Nifty future by around 50 points. But the fall was bought into and Nifty future closed higher than Tuesday's high.
19. After the markets close, Fiscal Deficit data came and that was very positive.
20. Today during the market hours, Manufacturing PMI data will be out. September Auto sales data will also be out.
21. Though everything looks positive, profit booking towards the end of the day is expected as our markets are closed tomorrow.
22. Traders will not like to carry positions ahead of three days holidays.
23. We will be reacting to US Non Farm Payroll data on Monday
24. So it will be interesting to see where the markets close today.
25. Nifty future is expected to trade between 7960 and 8080 today.
26. Those who created positions based on my advise, can exit the positions partially as VIX is down.
27. For example, 7900 Call and Put has given Rs 30 profit in three trading sessions.