Pre Market Report, March 04, 2020 | Stocks and Commodities

March 04, 2020
Time: 8.30 am

Pre Market Report:

1. US markets fell after rising more than 5% the day before.
2. Dow fell about 800 points.
3. Fed cut rates by 50 basis point in a surprising move, 2 weeks ahead of Fed meeting.
4. This is the first out of turn rate cut by Fed after 2008 financial crisis.
5. Other Govts are also acting.
6. Yesterday Australia and Malaysia cut rates.
7. South Korea announced about 10 billion extra budget measures.
8. US is planning fiscal measures also in addition to monetary measures.
9. Now pressure mounts on RBI to cut rates.
10. If RBI cuts rates, there will be powerful short covering.
11. Some people looking for that opportunity to short the market.
12. SGX Nifty is down by 60 points.
13. Asian markets are mixed.
14. Weekly options will add to volatility.
15. Yesterday SGX Nifty hit 11220, then shot up to 11440 just after Fed rate cut, only to fall back to 11220. SGX Nifty swung more than 500 points.
16. Markets may be highly volatile but may trade between 11000 and 11500.
17. Option premiums are so high due to huge volatility.
18. Bank Nifty 26000PE traded at Rs 160 yesterday.
19. Gold and Crude are higher after US rate cut.
20. If the markets do not stabilise, we can expect some action from Japan, UK and Europe.
21. On every bounce I have been selling Call options.
22. I sold 11500, 11600CE weekly and 11600 and 11800CE in monthly.
23. Bank Nifty weekly sold 30000, 30200, 30500CEs.
24. Yesterday sold 29800CE also in weekly.
25. Remember rate cuts do not solve the problem of Corona Virus.
26. I will cut all Call options, if there are no more bad news from Corona front.
27. But so far, more and more bad news coming.
28. While writing the blog, SGX Nifty as well as US futures are recovering.
29. Now (8.18 am) SGX Nifty trading around 11275.
30. Until the VIX is very high, Corona problem continues, not going to predict the Nifty range.