Mkts to trade rangebound today

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It's Thursday morning and while the USA had a bad Wednesday night, the global markets, the Asian markets are dealing with it pretty ok. We saw fall in the morning but most Asian markets have recovered well off their low some in China are actually doing very well but still the Dow is140 -points so there is some uncertainty in the global space once again. Lts see whether we have a flat session, remember we have been consolidating through out the week or there is some turbulence or some volatility in store for us this Thursday.  

 

On markets today:

 

I think we will have another range bound kind of session I don't think there should be too much by way of excitement because looking at what the other Asian markets are doing we shouldn't fall off a cliff very sharply but there has been a bit of tiredness in the market for the last couple of sessions. So it's entirely possible that the market slips into a bit of a range and spends another quiet day.

 

I don't think there should be a sell off neither there should be a big major rally given what's happened in the US overnight. Os maybe a bit of green a bit of red but broadly within a 30-40 point range of the Nifty is what one would expect to see today. Low volumes and probably another range bound session, more consolidation.

Asian markets:

 

Asia is not dealing with the US cues too badly. It is not like a big sell off across Asia some markets are down, Kospi is drifted into the red again, the Nikkei is recovered from the lows but its still down about a 100 points, Philippines is down, China is doing pretty well and some of the other markets are a mix of green and red.So no sell off as such but some pressure in the markets there.

 

Is it just bad news for the US?

 

A bit of that but there is a bit of a debate going on now and one would have expected to see that. The Fed rate cut got priced in far too easily and far too soon and as we approach that event some question marks are being raised on whether they will move or not and it is causing a bit of flutter for most of those markets and that's pretty much along expected lines that's how markets typically tend to move.

 

The news from the US is not good yesterday. The Beige book report is not good as Glenn was just talking about pending home sales have fallen fairly significantly, non-farm job creation remains very low.

 

Now that may all mean that there is a rate cut which is coming but the US economy remains in very tricky kind of shape so its not good news from out there. If we just look at the internals the volatility is gone up a little bit yesterday; the Yen is showing you some first indications of moving back to 115 and thereabouts and maybe even above that.

 

So one needs to watch that very closely. So we are in a system of flux, Asia is doing better in the US as they should be doing and as they are expected to do.

 

But if the US continues to slip now while Asia may not fall much, it may not rise much from here.  In the next few days what we can see is generally range bound kind of situation across global markets till we get to that big event.

 

Markets this morning:

 

A 15-20 points either on Nifty is entirely possible but I think today atleast for the first half maybe a range of 4,450 or 4,500 thereabouts. We should not see a big variation beyond that range. Once you get to slightly lower level 4,450 sub- 4,450 there might be some buying which might come in. Above 4,500, given what's happened in USA, may be traders will choose to take profits and even the bears will come back into play.

 

My guess is we will probably spent the day within that kind of a range and the closing today will be interesting too. So play for the range about market I don't think there will be any great joy training the Nifty today.

 

However in individual stocks that's the key thing, even yesterday a few stocks made gains and that is the thing whether one can see a reasonable breadth, may be 2:1 kind of breadth and see a handful 15-20 stocks still generating those 5-6% kind of daily return and if that happens its okay.

 

We are consolidating in a band with individual stocks performing that is acceptable but it should not start drifting down now because negative closings will keep on reinforcing the tiredness factor into psyche of traders because last three days were quite sluggish.