Pre Market Report, March 18, 2020 | Stocks and Commodities

March 18, 2020
Time: 8.15 am

Pre Market Report:

1. US markets moved more than 4% up or down for 6 consecutive sessions in 1929 Great Depression.
2. Yesterday it moved 4%, for 6th consecutive session.
3. Now DOW futures are more than 4% down.
4. This crisis is bigger than 2008 Financial crisis.
5. Day before yesterday HDFC bank ADR was down by 10%.
6. So Bank Nifty fell yesterday, after trading higher initially.
7. Yesterday HDFC Bank ADR was up 8.5% and Infy ADR was up 6.8%.
8. Asian markets are also not bad.
9. Australia is down while some other markets like Japan, Singapore, China, Taiwan are up.
10. SGX Nifty is trading between 9000 and 9100.
11. In three trading sessions, FIIs have sold for US$2 billion.
12. That is a huge selling.
13. DIIs are actively supporting the markets.
14. Option premiums are very high as India VIX keep increasing.
15. Nifty 7700PE, least strike available, trading around Rs 40 even for tomorrow expiry.
16. Bank Nifty 20100PE, least strike available, trading around Rs 290 for tomorrows expiry.
17. I do not remember seeing this kind of premiums even in 2008.
18. But in F&O, data looks encouraging.
19. FIIs covering their short positions, writing puts.
20. While writing this blog, SGX Nifty fell suddendly to 8900.
21. Continue to watch DOW futures, if that goes to lower circuits, more panic will come here.
22. It will be interesting to see how Infy and HDFC Bank will open.
23. On any bounce, time to unwind long positions.
24. We may be in for a prolonged bear market.
25. Things may change if Corona Virus disappears.
26. But that may take time.
27. Until then be cautious.
28. On any bounce, sell Call options, in small quantities.
29. As long as 8800 holds, we can expect some recovery.
30. Be safe than sorry. I sold Nifty 9500CE and Bank Nifty 24000CE in weekly options yesterday.