Pre Market Report, July 13, 2017 | Stocks and Commodities

July 13, 2017
Time: 8. 40 am

Pre Market Report:

1. Yesterday December Nifty 9000 Put was up by Rs 7 despite Nifty rising by 30 points.
2. December Nifty 11000 Call was up by Rs 11.
3. This shows that market participants expected a decent gap up or gap down today.
4. Inflation, IIP data and Janet Yellen's comment were the reasons.
5. All three came favourable to markets and today Nifty will gap up by about 50 points.
6. Inflation was at multi year low and much below the RBI's minimum target rate of 2%. (RBI target is 2% to 6%)
7. IIP data was bad and hence RBI has every reason to cut the rates.
8. Janet Yellen's comment triggered rally in US markets and hence global cues is very good.
9. I have given 10 reasons to be bullish about markets.
10. People give only one reason for bearishness.
11. Technical people say markets went up without even a small correction and correction has to come.
12. Then History does not repeat every time and this time due to various reasons technical people will lose the battle if they take bearish view.
13. Fundamental people say the valuation is very high.
14. If the markets sense that earnings will improve in the next 6 months to one year, participants will buy even at higher valuation, one year down the lane, valuations will catch up.
15. Remember when there is clarity in everythings, prices will be very high.
16. Bull market is born out of Pessimism, Grow out of Scepticism, Mature out of Optimism and Die out of Euphoria.
17. As long as technical people are talking about imminent correction and Technical people are shouting about over valuation, we are in the stage of "Scepticism"
18. People who are following Elliot wave firmly believe that 1000 point correction is coming in Nifty. 
19. Markets will reward only those who can read between the lines.
20. Severe correction is ruled for for two major reasons: (i) Mutual funds keep receiving large amount of money, I myself never invested in Mutual Funds but invested Rs 1 crore in the last two months and planning to invest Rs 10 crores. They are still sitting with huge Cash and any fall they will get in. (ii) Now the P Notes is banned from F&O, huge short selling is ruled out when markets downtrend begins. P Note money is mostly black money of our people which is used to short the markets to convert their black money to white. This is a complicated issue to write in a blog.
21. So be bullish, if you are long, hold on, otherwise buy on dips or sell Put options at a distance.
22. Yesterday I sold huge amount of December 9000 Put and some 11000 Calls.
23. That gives about 40% return per annum for my investment, I am more than happy to get that kind of return with such a low risk.
24. I sold more Puts than Calls as I took bullish view and that has become correct now.
25. Today I expect Nifty to trade between 9820 and 9900.