Crisis could prolong economic pain : Indian stock market will continue to be under selling pressure.

As we predicted yesterday, market opened with positive note but lost all the gains and finally closed flat. Global pressure are mounting more and more, situation are getting worst, wall street is not ready to listen to anyone. Not even Bernanke or Paulson is able to cool down the slide for even a day or two, market are going down 1 years low, then 2 years low and who know 3,4,5 are in pipe. But why all of a sudden too much cry? It is because financial pain is so much that no one can cure it other than TIME.

Bernanke says, “US may be facing prolonged period of economic pain; door opens wider to rate cut on or before Oct. 28-29. Consumers -- major shapers of economic activity -- have buckled under the weight of rising joblessness, shrinking paychecks, hard-to-get credit, declining net wealth and tanking home and stock values.

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HBJ Capital’s View for Wednesday…

• We are feeling very bad to get up every day and say “market will fall further” but what to do telling fact is our job and what macro/micro economic factors indicates is very clear, Indian market are expect to slide further.
• Expect 1-2% fall in Nifty on Wed, when sentiments turns bad and pessimism take a larger space in investor’s mind, no good news is going to be good.
• One should continue to hold SHORT or PUT position in Nifty. Probability of further fall in terms of magnitude is low but possibility of bounce is lesser. No rate cut by FED or Central Bank will help.
• Once again just to re-iterate TIME is the only solution to this crisis and core-hearted investors should in fact feel excited to see all the great stocks which he/she was dreaming to hold during last 2-3years are able to get that, so why are you waiting for go ahead and buy buddy!!!
• This is the best time to start buying slowly at every dip, in fact you can continue buying for 6-8 months because this market is not going to see the light of day until next year mid. “Earn money from your daily job and Invest in the market” should be your mantra now.

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Amid the financial crisis in the US, Indian investors have witnessed an erosion of about Rs 2.3 lakh crore in their wealth in Sept. The fall in the US markets was lower with the S&P 500 and Dow Jones both declining by around 9% and 6%, respectively, while emerging markets lost around 18 % during the month.

Pessimism in the financial markets following the filing for bankruptcy by Lehman Brothers, Merrill Lynch's sell-off, the bail out of AIG and perceived uncertainty around the US bail-out package added to investor fears. Investor sentiment was also affected on news of the possibility of Fortis filing for bankruptcy, indicating problems in the European financial markets as well,

Do you mean US is going to pass thru hard time for long? Yes, it will and why not, it has to face the heat. Economic power is shifting towards Asian Economy, highest consumption based countries are here, they will drive the next wave.

-HBJ Capital Team