MORE DANCING BEARS AHEAD...?

FROM AN EXPERIENCE

1. Stir up waters to catch fish. (Look for opportunities where no one likes to go. The best stocks over the next 20 years will be stocks no one knows about today. Use stock screens to ferret out the unknown and undiscovered.)

2. Despise the free lunch. (Don’t take free advice from friends, family, websites, magazines, television, newspapers, or newsletters. And, even when you pay for advice, understand that you must take full responsibility for every single decision you make. And, remember, what has worth is worth paying for.)

3. Avoid stepping into a great man’s shoes. (Trade within reason and know your own limitations. Swing for singles, not home runs each and every time. Very few people can trade like the pros and still have a normal day job. Customize your approach to the time and skills you have right now.)

4. Strike the shepherd and the sheep will scatter. (For every sector, pick a leadership stock and put that stock on your radar. If it falters, the rest of the group will as well, especially those at the bottom tier which will fall faster and harder than the rest.)

5. Work on the hearts and minds of others. (Knowing what the market loves and hates the most will lead you to opportunities. Knowing what the herd thinks and feels at all times is crucial.)

6. Disarm and infuriate with the mirror effect. (Good traders know what is working well and who has the hot hand and why. Use that information to your advantage.)

7. Never appear too perfect. (Hubris is the enemy. We’re only as good as our next trade. All track records – especially very good ones – are absolutely meaningless. Stay humble or the market will do that for you.)

8. Do not go past the mark you aimed for. In victory, learn when to stop. (Know your exits and stick to them. The biggest losses usually come right after our largest successes in the market. Know this and guard against it.)

9. Assume formlessness. (Have a plan and be confident in that plan, but don’t stay stubborn when you are wrong. Flexibility to take corrective action and willingness to accept it and move on will serve you well. Change in the market is an ever present challenge.)

                                                                                                                              (to be contd) 

WE SEE THE UNFORESEEN – PROVED ONCE AGAIN - CHECK IT OUT 

Hi friends,

Did you all notice what happened to Nifty Futures below 5171 last week?
Our subscribers initiate 5100PUT of May @ Rs81.50/- on Friday exactly @ 10:20AM (i.e. after NIFTY FUTURES traded below 5171 for 5 minutes and booked the profit @ Rs120.50 - when NIFTY FUTURES hits 5085)
Do you find any other ATM machine other than our prophecies here? :)

Please scroll below (to the previous post)  to know our insight for the 'PUT option' trading strategy (MAY) written exactly last week 

WHAT'S GOING TO HAPPEN TODAY....?

TRADING NIFTY LEVELS FOR MAY 07

Day’s Resistance @ 5100-32-57

Day’s Supports   @ 5062-42-5026

If cuts & trades above 5095 for 15 minutes, watch an intraday hike upto 5121-31-43-56

Suppose if sustains below 5095 for 5 minutes watch a sure slide upto 5065-45-26

INTRADAY SELLING TIPS TODAY (MAY 07)

1) Sell PFC @ 156.10                                 T – 149.80

2) Sell FINANTECH on rise around 625    T – 594.50

3) Sell AUTOIND @ 141.10                        T – 133.50

4) Sell RELINFRA around 500                   T – 485.50

5) Sell HINDOILEXP @ 114.80                   T – 108.80

6) Sell BANKBARODA around 698            T – 674.80

7) Sell TORNTPOWER @ 193                    T – 187.20

Targets will be achieved slowly in intraday at times - 
All you need is PATIENCE-PATIENCE-PATIENCE

JOIN US AND ENJOY THE BENEFITS EVERYDAY IN INDIAN STOCK MARKET

ALL THE BEST FRIENDS

POSITIVES & NEGATIVES OF THE WEEK

Positives:

1) Payrolls in Feb and March are revised higher, led by the private sector and offsets April weakness. Avg duration of unemployment while still high, falls to 1 yr low.

2) Initial Jobless Claims end 3 week run above 380k and total 14k less than expected at 365k.

3) ISM mfr’g surprises to upside, especially in light of regional weakness, at 54.8 vs 53.4 in Mar and est of 53. Best since June ’11.

4) Vehicle sales hang in above 14mm for 4th straight month.

5) Q1 Home Ownership rate falls to 65.4%, back to the 57 year average, things normalizing, renting helps create more dynamic, mobile, flexible economy.

6) RBAustralia cuts rates an unexpected 50bps. Having conducted one of the most stable monetary policies (kept rates above rate of inflation) over the past 30 yrs, they have room to maneuver.

7) Spanish and Italian bond yields fall.

Negatives:

1) April Payrolls rise only 115k, 130k of which from the private sector. Participation rate falls to lowest since 1981, household survey declines as does size of labor force, avg hourly earnings flat m/o/m and up just 1.8% y/o/y, still below the rate of inflation.

2) ISM services in April falls to lowest since Dec at 53.5 vs 56 in March.

3) Retail comps in April miss expectations (weather give back?) .

4) Spain’s economy as expected officially back in recession.

5) German unemployment unexpectedly rises in April.

6) Euro zone mfr’g and services composite index revised to 6 month low.

7) UK mfr’g and services indices also fall to multi month low.

  Euro zone CPI up 2.6% y/o/y vs 2.7% in March, above estimate of 2.5% and higher than 2% ECB target rate for 17 straight mo’s.

9) Spanish and Italian stocks trade lower again.

10) China’s PMI services index falls to 3 month low and while mfr’g PMI up at best since Mar ’11, was slightly softer than expected.

ALWAYS FOLLOW THE TREND

THE TREND IS YOUR FRIEND EXCEPT AT THE END WHEN IT BENDS

INDIA MUST HEED S&P WARNING, SAYS RBI

Standard & Poor’s warning that it might downgrade India’s credit rating is a much-needed shot across the bows for the country’s government, according to YH Malegam, a board member of the Reserve Bank of India (RBI).

“They have sounded a warning,” Malegam, who also chairs India’s National Advisory Committee on Accounting Standards, told Emerging Markets.

Last week S&P downgraded the country’s outlook to “negative” from stable, with a one-in-three chance of a sovereign downgrade if India failed to tackle its widening fiscal and current account deficits.

In an exclusive interview with Emerging Marketsyesterday S&P president Douglas Peterson said its decision had created a “huge dialogue” in India between officials, banks, policy makers, and industrialists. “I was interested in how much impact our decision had,” he said.

Malegam blamed the problems on malaise at the heart of government, with Indian politicians proving incapable of convincing the business community that they are committed to cutting red tape and boosting growth.

“Policy making has slowed down, which has led to a lack of confidence across the business community,” he said. “Many business people think the government is either not able, or not willing, for political reasons, to improve the business environment, or improve the economy.”

Many say India’s directionless government, helmed by premier Manmohan Singh, should be blamed for continually backtracking on, or watering down, pro-business reforms designed to slash bureaucracy and drag in foreign investment.

One clear example from late 2011 was Delhi’s decision to backtrack on a foreign direct investment (FDI) bill to grant foreign retailers like Tesco and Walmart unfettered access to India’s consumer markets.

Malegam blames the increasing federalism of India’s economy, a process led by regional voices such as Mamata Banerjee, the firebrand socialist leader of West Bengal. Banerjee was a leading dissenter against last year’s FDI bill, and usually decries foreign investment of any kind.

Malegam, one of the country’s clarion voices on financial market regulation, fears that rising regionalism is weakening the power of legislators in Delhi to act in India’s beset interests.

“A more federal India is creating a situation in which the regional parties are becoming more powerful,” he said. Those parties are in turn collectively preventing the two major parties [the Indian National Congress and the Bharatiya Janata Party] from having a stable majority in the centre. This is denuding the power of the federal structure.”

Malegam said he believed India’s long-term trends remained “good” based on its young population and a solid retail market. In February Boston Consulting Group forecast consumer spending would hit $3.6 trillion in 2020, from $991 billion in 2010.

But Malegam said that growth depended on improved confidence among Indian business leaders. “If growth can rise and inflation stabilizes, things can get better. But the trouble is that right now our business community just doesn’t have enough confidence in the government.”

In April, the IMF said it expected Indian’s economy to grow by 6.9% in 2012, slightly below its January prediction of 7%, but a significant drop on the 8.5% posted in 2011. The IMF said concerns about governance and slow project approvals had “weakened business sentiment” which along with global uncertainty and policy tightening had “adversely affected investment”.

FACEBOOK IPO DETAILS

Facebook has just released a revised S-1 filing (link) which list additional information on the IPO. Among the details:

The IPO would value the company at as much as $74.8 billion, based on a total of 2.138 billion Class A and B shares outstanding after the offering, assuming a $35 share price. Wasn’t this supposed to be $100 billion?

Total shares offered wil be 337,415,352 at a proposed price range of $28-$35 (mid point of the range is $31.50)Facebook estimates: “We estimate that our net proceeds from the sale of the Class A common stock that we are offering will be approximately $5.6 billion, assuming an initial public offering price of $31.50 per share, which is the midpoint of the price range on the cover page of this prospectus”

Primary shares (proceeds going to company) will be 180 million

Selling stockholders shares will be 157.4 million: these proceeds will not go to the company

Zuckerberg will do the following: “In connection with our initial public offering, Mark Zuckerberg, our founder, Chairman, and CEO, will exercise an outstanding stock option with respect to 60,000,000 shares of Class B common stock and will then offer 30,200,000 of those shares as Class A common stock in our initial public offering. We expect that the substantial majority of the net proceeds Mr. Zuckerberg will receive upon such sale will be used to satisfy taxes that he will incur in connection with the option exercise”

Zuckerberg would control over 57.3% of the capital stock voting power following the IPO

Facebook says it has $3.91 billion in cash as of March 31. It estiamtes it will have $9.511 billion in cash assuming a $31.50 IPO prices

The company reports $381 Million in Income from Operations; this number was $388 million a year earlier. Better watch those expenses…

STORM CLOUDS ENCIRCLE INDIAN ECONOMY?

The mood of India’s political and economic elite has darkened in recent months. Not only has growth slowed, even as inflation surges ahead at a near double-digit pace. A sharp increase in the country’s fiscal deficit and a yawning current accounts deficit have raised fears that India could be roiled by capital flight or even a balance of payment crisis akin to that of 1991, when India, facing state bankruptcy, was forced to airlift its gold reserves abroad to secure emergency IMF loans.

The possibility of a 1991-type crisis was directly raised by D. Subbarao, the head of India’s central bank, the Reserve Bank of India, during an economic forum in New Delhi in the middle of April.

With Prime Minister Manmohan Singh in the audience, Subbarao compared several key contemporary economic indicators with those of 1991.

In 1991 the fiscal or central government budget deficit was equal to 7 per cent of Gross Domestic Product (GDP), whereas in the fiscal year that ended in March, it is projected to have been equivalent to 5.9 per cent of GDP. The current account deficit is at 3.6 per cent of the GDP, which is higher than in 1991. Short term external debt (this includes both government and non-governmental debt) is even worse at 23.3 per cent of GDP versus 10.2 per cent in 1991.

“That is quite a disturbing picture,” conceded Subbarao. “Nevertheless,” he continued, “I would still argue that in 1991, an implosion was imminent. In 2012, an implosion is not imminent.”

What is indisputable is that India is beset by mounting economic problems and that the world capitalist system is in the throes of its longest and most convulsive crisis since the Great Depression.

In the just completed 2011-12 fiscal year, India’s budget deficit (the difference between government revenue and total expenditure) was Rs. 5.22 trillion (over $100 billion), equal to about 40 percent of the central government’s total expenditure, and at an expected 5.9 percent of GDP, far higher than the government’s deficit-to-GDP target of 4.6 percent.

For the April 2012-April 2013 fiscal year, the Finance Ministry is projecting a decline in the deficit-to-GDP ratio to 5.1 percent, as a result of economic growth, spending cuts—particularly on fuel and fertilizer price subsidies—and increased revenue from disinvestment (privatization) of public sector units.

However, most financial analysts do not believe the government’s claims that it will be able to slash the deficit-to-GDP ratio by almost one percentage point in the coming year and to below 4.5 percent in the 2013-14 fiscal year.

To begin with, the growth rate has slowed. And with the European Union the single largest recipient of Indian exports in economic turmoil, there is little reason to believe it will soon bounce back.

In 2011-12 GDP growth fell to 6.9 percent, a drop of 1.5 percent from the previous year. While the Finance Ministry claimed in the budget delivered two months ago that India’s economy will grow 7.6 percent in the current fiscal year, the credit rating agency Standard and Poor’s is predicting GNP growth of just 5.3 percent.

India’s current account deficit (the gap between all incoming and outgoing trade, services and monetary transactions) has been widening at an alarming rate due to a mounting trade deficit and a decline in foreign investment. During the first three-quarters of the 2011-12 fiscal year, the current account deficit increased by $43 billion.

This in turn has placed pressure on India’s foreign exchange reserves. In 2008, India had reserves of $315 billion enough at that time to pay for 13 month’s worth of imports. Today it has reserves of $294 billion, which is sufficient to pay for 7.5 months of imports.

A significant factor in India’s trade and current accounts deficit is the high price of oil, as India imports 80 percent of its oil. But even excluding oil, imports are rising more rapidly than exports. While India increased its exports by 21 percent in the 2011-2012 financial year, its imports grew by 32 percent, contributing to an increase in the trade deficit to $185 billion.

Citing the increasing size of the fiscal deficit and the government debt-load, Standard and Poor’s (S&P) recently downgraded India’s sovereign debt outlook from “stable” to “negative.” The agency also warned that there is a 33 percent chance of a downgrade in the country’s debt rating from the lowest possible “investment grade” rating to a “junk grade” designation. S&P’s move means that the Indian government will have to pay higher interest charges and, should it and other credit rating agencies slash India’s credit rating, much higher. In 2011-12 India’s interest burden amounted to Rs. 2.8 trillion ($53 billion), equal to more than a third of the government’s total revenue of Rs. 8 trillion ($153 billion).

S&P’s announcement caught the Indian government and elite completely off-guard. The Times of India reported that Finance Minister Pranab Mukherjee’s first public comment was that “there is no need to panic,” but noted wryly that this was aimed more at his own ministry than the general public.

“[We] deserve better ratings than countries like Tunisia,” said a miffed Finance Ministry official after the downgrade—a reference to the fact that India’s credit rating ranks with that of Tunisia, a country whose economy is in turmoil following the overthrow of the US-backed dictator Ben Ali in early 2011.

In a revealing picture of the power these credit-rating agencies wield over national governments, the Times of India reported that two weeks before the downgrade, Indian Finance Ministry officials pulled out all stops when S&P’s Singapore-based analyst Takahira Ogawa visited New Delhi. Citing India’s supposedly bright economic prospects, they sought to convince Ogawa that India’s credit rating should be upgraded.

Instead, S&P, speaking on behalf of international capital, chastized India’s Congress Party-led coalition government for not making good on its promises to slash social spending and implement a new series of pro-big business “reforms” due to popular opposition.

“We expect,” said the S&P report justifying putting India on a credit-watch, “only modest progress in fiscal and public sector reforms, given the political cycle—with the next elections to be held by May 2014—and the current political gridlock. Such reforms include reducing fuel and fertilizer subsidies, introducing a nationwide goods and services tax, and easing of restrictions on foreign ownership of various sectors such as banking, insurance, and retail sectors.”

In response to the S&P announcement, India’s government scrambled to demonstrate its commitment to such “reforms,” with Prime Minister Manmohan Singh announcing his government’s intention to hike the price of petrol and deregulate diesel fuel. The latter is used heavily by railways and trucks, so increases in the cost of diesel fuel quickly translate into food price rises. As it is, food prices have been rising sharply since 2008, further squeezing the three-quarters of the population who survive on $2 or less per day.

Like its rivals in Europe, North America, and elsewhere in Asia, the Indian bourgeoisie is determined to make the working class and toilers pay for the capitalist crisis.

Moreover, notwithstanding the bombast of the Indian bourgeoisie, India, with its growing dependence on foreign borrowings to finance its fiscal deficit and large and rising current accounts deficit, is increasingly vulnerable to capital flight and a European-style sovereign debt crisis.

CHILLA..........X

DISCLAIMER 

THE RECOMMENDATIONS MADE HERE DO NOT CONSTITUTE AND OFFER TO SELL OF A SOLICITATION TO BUY ANY OF THE SECURITIES/COMMODITIES OF ANY OTHER INSTRUMENTS WHATSOEVER MENTIONED. NO REPRESENTATIONS CAN BE MADE THAT THE RECOMMENDATIONS CONTAINED WILL BE PROFITABLE OF THAT THEY WILL NOT RESULT IN LOSSES. READERS USING THE INFORMATION CONTAINED HEREIN ARE SOLELY RESPONSIBLE FOR THEIR ACTIONS. SURFING OR USING ‘tradersharmony.blogspot.com' DEEMS THAT THE SURFER ACCEPTS AND ACKNOWLEDGES THE DISCLAIMERS AND DISCLOSURES.THE INFORMATION PUBLISHED ARE FOR EDUCATIONAL AND INFORMATIVE PURPOSE ONLY AND THE USER/READERS SHOULD TAKE ADVICE OF HIS/HER ADVISER BEFORE TAKING ANY DECISION FOR BUYING, SELLING OR OTHERWISE DEALING WITH SECURITIES/COMMODITIES OR ANY OTHER INSTRUMENT WHATSOEVER.