It's still a difficult period for mkts

We sorely need something to calm the nerves?

We do but I do not think this will do. We have got oversold yesterday because the market was fearing that the US markets would sell off last night and that seem like the logical thing to have happen but there is a pullback. To that extent our market, which went to the January lows and even traded below that for a while might actually give you a little bit of a bounce back. We have seen these kind of bounce backs and how shallow they are and for how long they last. I am not sure what has happened intra-day yesterday and the US has risen enough for us to jump in joy, we still are in a very difficult market. Has value emerged in some stocks possibly yes, but the market I do not think is telling you that it is willing to run away from here. So we might start with some gains today, might get our head above 4,700 as well on the Nifty but I do not think traders will be in a mood to latch on to that and predict 5,500 next.

It still remains a difficult market but I think we might have a bounce in the morning because we have got oversold in anticipation of a US fall yesterday.

Asian Indices :

The Nikkei is not doing much as very flat, China is in the red now, Korea has dipped into the red, the Hang Seng has given up quite a bit of its gains now up barely 1% and Taiwan is up 0.5%. Not convincing strides across Asia, it was a good pullback intra-day in the US but it has not exactly injected fire into the belly of the Asian markets this morning.

Interesting point for the global markets . It seems that the arm-twisting is so intense; you don't know how bad a particular day could get?

Yes and markets reacting to dribs and drabs of news; one day the Fed does something, the market has a big rally, the next day it starts selling off. One day there is a bit of a positive news or analysis from one big house and then the market takes it. So very skittish kind of trades going on in global markets, at least for the moment pending the US Fed meeting the Dow seems to be holding out; it's not collapsed completely. The collapse seems to have happening outside of United States curiously. Most emerging markets seem in far weaker shape than the US from a market perspective not from an economic perspective. So that's quite interesting.

I think the weight of or the complete absence of global buying in most of the emerging markets is a big hamstring right now for most of the global markets out there. The mood is been vitiated completely; looking at what Asia has made of that intra-day reversal there is hardly any conviction, small 0.5%, almost an apology of a pullback and that's getting sold into then again Asian markets are going down.

I think the conviction is completely lacking in any of those markets there. None of them are giving the sign of strength and since we are also in a fairly bad and we are waking up to this kind of cues every morning, I think our lack of conviction is completely understandable. There is a global confidence problem in equities and we are no different.

We seem to be front running the concerns, given the way we behave?

Yes and its difficult to map what the market is going to do. The one thing we can say is that it is showing more weakness than strength that whatever happens in the interim with small rallies. Since we managed to hold out 4,600 odd, so this morning maybe there is a weak bounce, maybe we see some covering. All those guys who must have kept their shorts open expecting a big US down leg once again last night, they might come again this morning to cover up because they have not got that or they will not get that gap down opening because the US did not do too badly. So all of that might play out in the morning, which gets you probably back to 4,700.

I don't know whether it can get higher than that but the problem is where from there? - Are you seeing enough money, which is supporting the market at higher levels or all theses short covering rallies, which are lasting 50-60 points and getting slammed into. I suspect what will happen today is that you will probably see two-way movements, green in the morning and maybe at some point that will get sold into, flattish broadly maybe, we may spend the day in a 50-100 point range on the Nifty once we stabilize after the initial move and then fairly low volume kind of day grinding towards the end of the week.

I don't think anything has happened to deserve dramatic movements. Hopefully atleast because there is little bit of hope on the global horizon, it won't be a terrible Friday and we will not grind down below 4,600 by the end of the session today but that is a hope.

The successive ratio might be higher for someone who is going out and investing although even that seems to take a lot of courage now?

It does and we keep talking about why people are not buying and how they don't buy even when the markets fall and they always buy when the markets go up. But it's people's hard earned money so you can understand why they are reluctant to put in money at this point in time. I know there is being value but if indeed we are in a kind of bearish groove that we are in and I am sure lots of people have gone through these phases in the past.

After the first fall or some bit of the fall, value does emerge but that in the past experiences would tell you does not mean that is the floor for stock prices. It is true that you cannot find a bottom for many stock prices but sometimes you look at the screen and you get that feeling - do I want to put my money to work at this kind of a market because it's one thing for the mutual fund manager to have to go out and buy because prices have come off and he is in the business of investing public money. He cannot wait for the bottom and say - okay I will buy only when I think a certain Index level has come.

But individual investors - you don't want to lose you don't want to be in a situation where you thought value is emerged in a stock went out and bought. Then saw one-week down the line the stock 20% lower than that level.

So the only risk to this kind of approach to investing is that the market turns viciously and quickly against you and runs away from here in which case you would have waited and felt completely left out. But that is something, which most people would agree seems like an unlikely possibility. Sure the market may not fall too much more form here, sure there could be some short covering rallies the market might stabilize, consolidate and over a period of time move higher. But your risk is whether the Nifty suddenly gets away and gives you a 1000-point rally in which case you were left out. That looks a bit unlikely given the global context.

I can almost understand why people are reluctant to go out and put their own money to work despite seeming value having emerged in many stocks because sometimes value gets into deep value as we have seen in the past. This is not a suggestion that one should not buy anything despite the fall because some stocks are attractive. This is simply a defense of people who are reluctant to buy right now because I can almost understand why they are not doing it and who knows maybe in some cases they could be right as well.