Market Watch: Jan 31st 2008

10:45am – Sorry for delay in posting, ideally it should have been posted before 9:55am but due to un-reliable internet connection it was delayed…..

Yes, finally FED has cut the rate by 50bps, in fact FED doesn’t know what they are doing, US is in trouble, Bush is in trouble, and FED got the responsibility to bring US out of recession, it was FED only which brought the interest down to 1% in 2003 which created real estate boom and subprime is the byproduct of such action……the guy who created all these crisis is given the responsibility to fix it:-), actually FED is just copying what they have done 6 years back…and note my words rates are going to come down more and may be it will be down from 3% today to 1-1.5% by year end.

Coming back to DOW, after rate cut also stock market didn’t get smile in their face, Asian stock markets are confused thinking that why US didn’t jump or rise on FED unexpected 50bps rate cut…..India is not different from others…Indian markets are also in confused state, people don’t know what to do and more important people don’t know which direction US market will take tomorro?

As I look at the NSE index now it is down close to 1%, today indian market might be moving around +/-1% but we expect it to go higher in next couple of days if there is no unexpected news like RBI not cutting the rate (which was a surprise few days back) or any other US banks falling down so and so.

To Traders – We would suggest to go for buying call option of Feb after the expire today, do not short the market, Indian markets are just waiting to bounce back.

To Investors – Look for small cap stock which has fallen 30-40% in last couple of weeks.

- HBJ Capital Team

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