Pre Market Report, March 06, 2020 | Stocks and Commodities

March 06, 2020
Time: 8.15 am

Pre Market Report:

1. Dow moves 1000 point up one day and 1000 point down next day.
2. World markets are down, due to Corona Virus fear.
3. Earnings warning from Europe dragged the markets down.
4. Markets are struggling to cope with Corona Virus.
5. At the wrong time, RBI taken action against YES Bank.
6. YES Bank Board taken over by RBI, limits withdrawals.
7. That created panic in SGX Nifty.
8. SGX Nifty hit a low of 10800.
9. YES Bank issue has been handled just like US handled Lehman Bros.
10. US Fed cut rates by 50 basis point before markets open last Tuesday.
11. RBI will have to do something like that, otherwise, panic will be more.
12. But US Govt as well as Fed is Pro market.
13. But India, it is doubtful.
14. BJP 2.0 do not seems to bother about Economy.
15. PSUs are great wealth destroyers in the last decade.
16. It will be difficult to short the market at this time as bounce can come any time.
17. Yesterday only I felt, worst was over and expected some recovery.
18. Suddenly this YES Bank issue has come.
19. Expect both YES Bank and SBI to crash today.
20. IndusInd Bank will see the collateral damage.
21. FIIs keep selling in Cash market.
22. They also have huge short positions in F&O.
23. On any bounce, keep selling Call options, that is the only strategy working now.
24. I sold April 12000CE. Markets can recover anytime in this kind of oversold markets.
25. So it will make sense to sell far OTM Calls in next month contract.
26. First 45 minutes, there will be huge volatility.
27. So wait for markets to settle down before taking any action.
28. Best thing is to keep away if you have no positions.
29. Expect 3 to 5% fall in banking stock stocks.
30. No point in predicting the range, so not doing.
31. VIX is more than 30 for 6 consecutive sessions in US, longest after 2011 Europe crisis.