India is on verge of collapse

From another blog Here is prediction about Indian Economy by one of the leading Indian Astrologers based in USA. Though this astrologer has failed many a times but some of his predictions have gone remarkably accurate. India is on verge of collapse Dear Member’s Since last eight months I have been concern about India. Today, again I decided to read detail Indian wave of nature/Astro cycle chart and too me they are giving most scary signal. In my recent book I clearly mentioned that India Market would underperform compare to world equity market. Investing in S&P and US stocks advised proven one of the best of 2012. Currently I am reading India’s Astro/Wave of nature cycles and prediction article will be ready within few days. Its’ looks like Indian economy can fall before Greece or Spain. I issue a warning to those who are holding investment in India, in Indian real-estate market, equity market, bonds and Rupee. All these assets can tumble over night. It can create havoc in world financial market. This is most scary story is developing in World Astro cycle, and India can take place center point and start taking world into big scary whole, I don’t know how world market will react to this so please give me few days before I complete my study and publish article in the next week’s weekly newsletter. I warn Indian investors to stay away for all investments class like, equity, Rupee, real-estate and metals as these all assets may collapse. Big corporate, banks or business houses may fail, most scary scenario can emerge. I will be watching next 48 hours very closely before I put everything on paper and release it. Last week on Wednesday we released alert recommending, staying away from all investments, like equity, oil and metals for the next five days. Tomorrow is fifth day and would like to see how next two days perform. Below here is alert. Thanks & God Bless, Mahendra Sharma

Things are not as bad as doomsdayers claim

Relax, things are not as bad as doomsdayers claim Doomdayers are having a field day given our current market conditions. Calls range from the collapse of the eurozone to a fall in China’s economy. India is receiving its fair share of dark predictions ranging from runaway inflation expectations, a sharp rise in interest rates and below-par growth. If the predictions actually come out right, three-fourths of the world’s population will be living in poverty for the next ten years. The small proportion of individuals that has managed to hoard wealth will be invested in US treasuries, which yield below 2 percent, and gold, which yields nothing. India’s poor run will stop sooner than later and it will be despite the government. Reuters But more likely than not, the doomsayers’ predictions will not come true and the world will get on with its life, albeit with a few hiccups. It is the market sentiment that is giving rise to gloom and doom predictions, and these predictions will disappear once markets get back to normal. One has to remember that the theme in the 2000-2008 period was the collapse of the US dollar, unfettered growth in BRIC (Brazil, Russia, India and China) nations and an unstoppable rise in commodity prices. None of these bull market predictions have come true: the US dollar is gaining, commodity prices are falling and growth in BRIC nations has come off leading to negative returns in BRIC equities over the past four years. India is facing the worst market scenario since the 1990s. The Sensex and rupee are down over 15 percent from their peaks levels seen in late 2007, while ten-year benchmark bond yields are up by 350 basis points from their 2008 lows. GDP growth has come off from over 9 percent to below 7 percent, while inflation has trended towards double digits from levels of below 6 percent over the past four years. India was once seen as a country that could do nothing wrong; now, it is seen as a country that can do nothing right. Things will turn around for India India’s poor run will stop sooner than later and it will be despite the government. Take, for example, the IT sector. Infosys and Cognizant have guided for slower growth this year, but the fact is that their hiring plans are still robust with each of them planning to up the workforce by over 20 percent. The other majors of TCS, Wipro and HCL Tech are also having robust hiring plans. Why would IT majors hire if the outlook for business in the US and Europe are not good? The markets have punished policy makers enough for their follies. The fact that the government provided fiscal stimulus and the Reserve Bank of India provided monetary stimulus post the 2008 crisis, and their inability to roll back the stimulus quickly in the face of rising inflation is seen in the weak financial markets. The government and the RBI are now ultra-cautious in their approach to the growth-inflation trade off, and that makes for sounder policies that the ones that were made in the clamor for growth in the 2000s. The situation is similar to other sectors in the economy. Banks, especially the private sector banks have focused their attention of improving asset quality and the earnings growth rates of 30 percent and above for the biggies, ICICI Bank and HDFC Bank, shows the effort. Smaller private-sector banks such as ING Vysya have also delivered 30 percent or higher earnings growth. Airlines are cutting costs and restructuring to become profitable. Consumer goods companies such as ITC and HUL are reaping the benefits of a ten-year competitiveness exercise and have shown earnings growth over 20 percent in the past year. Doomsdayers, put your money where your mouth is China has realised the folly of over-investment and directed lending after a property bubble and a stock market crash. China’s equity index is down 50 percent from its highs seen in 2007 and its growth has come off from double digit levels to 8 percent and thereabouts. China’s policies will now be attuned towards steady growth, driven less by exports and more by domestic consumption. The US is still holding on to its status as the global powerhouse despite its issues on debt. Dollar bashers have had to hold their tongues as the dollar and dollar-denominated debt are still seen as safe haven assets. Eurozone debt issues will persist, but will they lead to the collapse of the euro and the world? The questions each euro nation must ask itself is what will the consequence will be of leaving the euro? The consequence will be as bad as the ones faced by South American countries when their currencies were devalued, hyperinflation and economic collapse. Euro nations will strive to stay in the eurozone with help from Germany and the European Central Bank. Germany itself is seeing resurgence in its economy with unemployment at two-decade lows and consumer and business confidence holding strong in the face of many negatives. Investors should also realise doomsdayers will never be short on markets even if they are predicting a market collapse. The reason is that they themselves do not believe their predictions. A true forecaster will put his money where his mouth is and doomsdayers are not true forecasters or risk takers. Hence, it is better to ignore doomsayers and look beyond the present. Arjun Parthasarathy is editor of www.investorsareidiots.com, a web site for investors.

Trading Calls for the day with timing

Rajeev USDINR Buy @ 54.4100 tgt 54.5500 54.7000 54.9000 stop @ 54.2500 CMP 54.4100 10:03:54 AM Rajeev EURUSD Sell @ 1.2740 tgt 1.2720 1.2700 1.2680 stop @ 1.2755 CMP 1.2740 10:03:54 AM Rajeev Gold Sell @ 1546 tgt 1541 1536 1530 stop @ 1551 CMP 1546 10:03:54 AM Rajeev AUDUSD Sell @ 0.9940 tgt 0.9910 0.9880 stop @ 0.9960 CMP 0.9940 10:03:54 AM Rajeev NZDUSD Sell @ 0.7660 tgt 0.7630 0.7605 stop @ 0.7680 CMP 0.7660 10:03:54 AM USDINR sport is trading above 54.3 has already broken the resistance of 54 level on closing basis indicates upternd to continue and will test 55 - 56 - 57 on higher side in near term 10:06:16 AM

Daily Report for 4th May 2012

EURUSD: Support 1.3060 – 1.3110 Pivot: 1.3144 Resistance: 1.3190 – 1.3230 Euro: The U.S. dollar remained broadly higher against its major counterparts on Thursday, as mixed U.S. economic reports and sustained concerns over the handling of the euro zone’s financial crisis weighed on demand for riskier assets. the bank left its benchmark interest rate unchanged at 1%, in a widely expected decision.. The pair was likely to test support at 1.3105, the low on April 23, and resistance at 1.3284, the high of May 1. Sustain trading below 1.3130 will indicate stop term top is placed and will bring to 1.3085 and 1.3050$ support level. Stochastic has drifted from overbought zone and is trading around 50% where turning towards oversold zone indicating short correction in the price to continue. GBPUSD: Support 1.6130 – 1.6165 Pivot: 1.6190 Resistance: 1.6220 – 1.6250 Pound: The British Pound was higher against the U.S. Dollar on Friday. GBP/USD was trading at 1.6186, up 0.06% at time of writing. The pair was likely to find support at 1.6160, Thursday’s low, and resistance at 1.6302, Monday’s high.It is taking support at 1.6180 which is 10 DEMA and trading below the same on closing basis will open the door for 1.6110 to 1.6060 levels where 1.6240 will be resistance level. Stochastic has drifted from the overbought zone and has given negative intersection and trading below 50% moving towards lower zone where correction will continue till the time resistance of 1.6300 holds. AUDUSD: Support 1.0200 – 1.0230 Pivot: 1.0275 Resistance: 1.0310 – 1.0350 The dollar strengthened against most major currencies on Thursday mainly due to weak manufacturing data out of Europe. AUD/USD tested the lower support level of 1.0240 and closing was just above the support level and crossover below the same will confirm the down trend to continue. Once the support is crossed on lower side target of 1.0100 to 1.0020 will be the immediate support level to be tested. Lower side 1.0020 is a strong support and after consolidation over there where some profit booking may be seen. We are looking at the bear flag pattern breakdown where the difference of the Pole is 600 points and expected breakdown target will be 0.9600 to 0.9550 levels. Stochastic are trading just below 30% zone with negative intersection and is moving towards over sold zone where some downside move is expected. Gold: Support: 1618 – 1627 Pivot: 1640 Resistance: 1650 – 1663 Gold futures added to losses during early U.S. morning trade on Thursday, after official data showed that the number of people who filed for unemployment assistance in the U.S. last week fell by the most since May 2011. Gold traded at a low of USD1,630 after opening was seen below the level of 1650 a troy ounce during the session. After breaching the support of 1645 confirmation of the down side was seen and today support is seen at yesterday low of 1630$ and sustain trading below the same will bring to 1622$ and 1615$ in near term. Stochastic are trading below 50% area and is moving towards oversold zone where further selling in price may be expected to continue. Silver: Support: 29.44 – 29.8 Pivot: 30.23 Resistance: 30.6 – 31.05 Silver which reverted from the level of 31.42 where resistance was respected at 31.5$ and is trading near the support of 30$ and sustain trading below 30$ will confirm the down trend where will continue in pattern breakdown moving to test 25A$ level. Sustain trading below 29.8$ yesterday low will continue for 29.2 – 28.8$ immediately where further 27.5$ and 25$ will be the medium term target. As it’s a rule after the breakdown short recovery was expected and this rise can be the selling opportunity where selling is seen from 31.2 – 31.5 range. From current level we will continue the bearish view if trading is seen below 29.8$ where before breaking the same short bounce till 30.25 will be the fresh sell opportunity. Stochastic are trading in just above oversold zoen where trading below 29.8$ will continue downtrend Crude: Support: 100.5 – 101.5 Pivot: 103.45 Resistance: 104.5 – 106.4 Crude: Crude oil futures came under heavy selling pressure during U.S. morning trade on Thursday, after European Central Bank president Mario Draghi refrained from pledging more liquidity-boosting measures and said the economic outlook in the region was subject to “downside risks”. There are worries that the region’s sovereign debt crisis could trigger a broader economic slowdown that would curb demand for oil. Crossover below 102.2$ will brings to 101.5 – 100.5$ levels and may go further down, where as failing to cross the same and trading above 104 will retest 107$ level. Stochastic are trading below 80% zone and is negative expecting down side move to continue.

EUR & POUND Short Term Report

Above Chart shows a good example of a head-and-shoulders top. The three bumps are clearly visible, with the center bump being the highest of the three. The left shoulder usually appears after an extended uphill run. The entire formation seems to stand alone when viewed in the context of a year’s worth of daily price data. This stand-alone characteristic makes the head-and-shoulders top easily identified in a price series. A head-and-shoulders top formation where the center peak towers above the other two. A pullback to the neckline occurs frequently. A trend line drawn along the bottoms of the two troughs between the three peaks forms the neckline. The line may slope in any direction but slopes upward about 52% of the time and downward 45% of the time with the remainder being horizontal. The direction of neckline slope is a predictor of the severity of the price decline.

EURUSD: Technically Euro has rose from the level of 1.2620 level and has rose to the level of 1.3120 and short correction of the rise testing the level of 1.2975 forming the Left Shoulder. There after the rise from the level of 1.2975 tested the fresh high of 1.3485 was the top of the Head and again tested the lower support @ 1.3000 levels where the neck line was seen and also the double bottom was formed. Short bounce was seen from the double bottom level testing the level of 1.3285 which was the resistance of Left shoulder & rise by 61.8% of the fall where reversal in price is expected from here. On lower side support is seen at 1.3000 to 1.3030 level where the Neck Line is coming and sustain trading below the same will bring to the lower level of 1.2700 to 1.2660 level in near to medium term.

GBPUSD: Technically Pound has rose from the level of 1.5235 level and has rose to the level of 1.5925 and short correction of the rise testing the level of 1.5640 forming the Left Shoulder. There after the rise from the level of 1.5640 tested the fresh high of 1.5990 was the top of the Head and again tested the lower support @ 1.5617 levels where the neck line was seen and also the double bottom was formed. Short bounce was seen from the double bottom level testing the level of 1.5920 which was the resistance of Left shoulder & rise by 76.4% of the fall where reversal in price is expected from here. On lower side support is seen at 1.5600 to 1.5640 level where the Neck Line is coming and sustain trading below the same will bring to the lower level of 1.5300 to 1.5250 level in near to medium term.

Nifty reversal pattern

After Europe Now China is a cause of Worry

An exclusive preview of an economic report on China, prepared by the World Bank & government insiders is alarming:

China could face an economic crisis unless it implements deep reforms, including scaling back its vast state-owned enterprises and making them operate more like commercial firms. "China 2030," a report set to be released Monday by the bank & a Chinese government think tank, addresses some of China's most politically sensitive economic issues, according to a half-dozen individuals involved in preparing and reviewing it.

It is designed to influence the next generation of Chinese leaders who take office starting this year, these people said. And it challenges the way China's economic model has developed during the past decade under President Hu Jintao, when the role of the state in the world's 2nd largest economy has steadily expanded.

The report warns that China's growth is in danger of decelerating rapidly & without much warning. That is what has occurred with other highflying developing countries, such as Brazil and Mexico, once they reached a certain income level, a phenomenon that economists call the "middle-income trap." A sharp slowdown could deepen problems in the Chinese banking & elsewhere, the report warns, and could prompt a crisis, according to those involved with the project. It recommends that state-owned firms be overseen by asset-management firms, say those involved in the report. It also urges China to overhaul local government finances and promote competition and entrepreneurship. The Chinese government must decide "whether it wants state-led capitalism dominated by giant state-owned corporations or free-market entrepreneurship."

Current forecasts by the Conference Board, a U.S. think tank, see the Chinese economy growing 8% in 2012 & slowing to an average annual growth rate of 6.6% from 2013 to 2016. Economists argue that China's annual growth rate will begin to "downshift" by at least 2% points starting around 2015. While some reduction in growth is inevitable—China has been growing at an average of 10% a year for 30 years—the rate of decline matters greatly to the world economy. With Europe & Japan fighting recession and the U.S. experiencing a weak recovery, China has become the most reliable source of growth globally. Commodity producers count on China for growth, as do capital goods makers, farmers and fashion brands in the U.S. and Europe.

How much the report will help reshape the Chinese economy is unclear. Even ahead of its release, it has generated fierce resistance from bureaucrats who manage state enterprises, according to several individuals involved in the discussions. China's political heir apparent, Xi Jinping, now vice president, has given few clues about his economic policies. Analysts expect the high-profile report will encourage Mr. Xi and his allies to discuss making changes to a state-led economic model that has alarmed Chinese private entrepreneurs while creating tension between China and its main trading partners, including the U.S.

Currently, state-managed enterprises tower over the Chinese economy, dominating the nation's energy, natural resources, telecommunications and infrastructure industries. Among other things, they have easy access to low-interest loans from state-owned banks.

China needs to restrict the roles of the state-owned enterprises, break up monopolies, diversify ownership and lower entry barriers to private firms. Currently, many state-owned firms have real-estate subsidiaries, which tend to bid up prices for land, and have helped to create a housing bubble that the Chinese government is trying to deflate. The report also recommends a sharp increase in the dividends that state companies pay to their owner—the government. That would boost government revenue and pay for new social programs, said those involved with the report. Chinese and U.S. economists say that dividend money from profitable state-owned firms now is often directed to unprofitable ones by the State-owned Assets Supervision and Administration Commission, or SASAC, which regulates the firms and tries to ensure their profitability.

China is vulnerable to a sharp slowdown, said Jun Ma, a Deutsche Bank China economist, because it relies too heavily on industries that copy foreign technology and doesn't produce enough breakthroughs of its own. South Korea was able to keep growing rapidly after it hit a per-capita income level of $5,000—about where China is today—because it pushed innovation. However, China lags behind South Korea badly in patents produced per capita, he said.

Chinese local governments often draw much of their revenue from the sale of land, rather than from taxes. The report urges that Chinese social spending be funded more by dividends from state-owned firms and by property, corporate and other taxes.