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We all saw what happened in October 2018 to the global stock markets. We were correct in our predictions ! 

In October 2018 -  there was a sharp correction in global equity markets, led by sharp declines in the US Equity markets and European equity markets - as predicted ! A lot of equity markets around the world tested yearly or multi-year lows. Some indices while correcting reminded us of 2008 !  

Our view for November and December 2018 remains unchanged as none of the following fears have left the markets :

a) Interest Rate hikes by US Fed

b) China - USA Trade Issues. Iran sanctions.

c) Italian Banking crisis

We might have a temporary pull back in global equity indices led by ^DJIA and ^GDAXI but we will see fresh lows in almost all the major equity indices in November through December 2018. The spillover could be till January 2019.

As of now just start buying physical Gold. We could see a level of US $ 1400.00 pto in the coming months.

Brent Crude Oil futures could see a sharp spike from the current US $ 72.45 pbbl levels in the coming two months.

Investors as advised to stay away from equity markets for the next couple of months.       


We were bearish on the global equity markets including India. We still are bearish for global equity markets till end December 2018. Emerging market equities and currencies were hammered in September 2018.

We will now see equity markets in developed economies get pounded in Q4 2018.

As predicted Brent Crude Oil tested US $ 84.00 pbbl level in September 2018. Our next level for Brent Gold price is US $ 90.00 pbbl within December 2018.


Indian Equity markets were down in September 2018. We predict NIFTY to test its 52 week low of 9850 in October 2018. We also predict NIFTY to test 9500 or even 9000 level by December 2018. As I print this update NIFTY is quoting at 10900.

Same hold true for BSE SENSEX. It will test its 52 week low of 31500 in October 2018. It will further slip to 28500 or even 27000 by December 2018. BSE SENSEX is trading at 36250 as I print this update.

INR has depreciated against the US $ from a level of 64.00 to a level of 73.61 as of today. All emerging market currencies have depreciated against the mighty US Dollar. We feel we will see a level of INR 75 to a US Dollar in October 2018.


US Dollar cannot keep rising against the world currencies the way its has rallied since May 2018. US Budget deficit and money printing will have its effect in Q4 of 2018. US Dollar will correct in December 2018. In December it would be the right time to buy physical Gold.

Investors are advised to limit their exposure to blue chip equities to around 25 % of their investible funds. Balance in Debt instruments and physical Gold.


Global Equity markets and Indian markets can correct from the current levels by 15 to 20 % from date till end December 2018. Limit your exposure to equities.

Invest in Debt instruments and physical Gold till the equity markets bottom out in Dec 2018 or Jan 2019.   

JULY 2018

Investors might be thinking the reason why I did not update the India web page since Feb 2018 ? I was not clear as to why the global equity markets including India were still bullish since Feb 2018 to June 2018 with so much negative indicators around the world ? But markets have their own reasons to move up or down.

I am clear now for the journey forward from July 2018 through December 2018.

Global and Indian investors are seriously advised to prune their exposure to Equities and Mutual Funds to the tune of 75 % or even 90 %. Sit on cash or buy physical Gold Bars and keep under the bed in one's bedroom !

Please do consult your CFAs and act accordingly. 

I am predicting a 25 to 30 % correction in Global and Indian Equities in July through December 2018. The correction could be worse in EU and Asian Markets. Brent Crude Oil could spike beyond US $ 84.00 pbbl due to geopolitics and Iran situation. There could be a massive public revolt in Iran which will be crushed by the clerics. About 3.00 million barrels a day supply of Crude Oil may be off the market due to - Iran, Venezuela, Libya and Iraq outages over the next six months through December 2018.    

The global equities situation could be worst than in September 2008. The recovery in September 2008 through March 2009 was spectacular. This time the recovery will take about two and a half years and will be very painful for the bulls. 

The reason of this global correction will be from a banking crisis in Greece, Italy and/or Spain. The trigger may not be from the US economy.

Banks in Italy and Spain are not in good health and may need bailouts. Greece will again be bankrupt for the third time since 2011. Venezuela is bankrupt. Argentina is on the verge of bankruptcy. Chinese and US exports will further dip. Correction possible in the prices of Agro Commodities - Soybeans, Wheat and Soybean Oil. 

The best way forward has to be capital protection. Cash or physical Gold is the only savior for the impending/predicted correction.

Gold could jump above its year high of $1380 and potentially beyond US $ 1450.00 or even US $ 1650 pto during the next six months or so.


Global equity markets are on fire including equity markets in India with BSE SENSEX crossing 36,000 levels and NIFTY crossing 11000 levels. We advise equity investors to take profits home and start allocating 10 to 20 % of investible funds into physical Gold over a 10 to 15 year holding period. We could see levels of Gold at US $ 6000 to 9000 pto by 2035 to 2040.

First Bull Run in Gold was witnessed when Prez Nixon scrapped Gold peg to the US Dollar under advise of then Chairman US Fed Reserve on 15th August 1971. Gold prices moved from US $ 35 pto US $ 850 pto in 1980. 1800% plus returns !

Second Bull Run from 1999 to 2011 when prices touched US $ 1920 pto in September 2011. 666 % returns !!

Third 20 year Bull Run started in Gold as per our estimates in Dec 2015 and will run till 2040. We expect prices to be near US $ 6000 pto in 2035 and near 9000 pto in 2040. 570% returns expected in the 20 year period  !!!


It will be close to a year that India witnessed de-monetization ( 8th Nov 2016 ) and GST was rolled out in India a few months back in 2017.

Both these events were historical in the Indian economy since it's independence in 1947. Indian GDP growth is highest in the world till date in 2017 inspite of some initial hiccups due to slow implementation of GST and slightly lower GDP forecast for 2018. For 2018 - also @ 5.80 % India will be the fastest growing economy in the world. Chinese GDP figures we dont trust. They are all stage managed !  

BSE SENSEX and NIFTY traded near their life time highs since the last six weeks. Today 30.10.2017 - BSE SENSEX and NIFTY closed at their life time highs - 33266 and 10360. Since both the indices are in uncharted territories - only extrapolation or trend analysis is the tool for prediction in the next two months of calendar 2017. Trend lines indicate further bullishness but sharp corrections are possible in bull markets. In fact these corrections are a healthy signs.

We expect a sharp correction in the global equity markets over the next eight weeks and Indian stock market will also correct but with a lesser beta. On sharp corrections we advise Indian investors to start buying the following stocks for a period of two to three years perspective :




These are military hardware related stocks in the Indian scenario.

HAL will come out with its maiden IPO before 31.3.2018. We will advise accordingly.

APRIL 2017


We are back and apologize to investors that our prediction regarding Ms. Hillary Clinton was incorrect. We can only say - To err is human !


Indian stock markets are near their 52 week and lifetime highs since yesterday/today i.e. 3rd and 4th April 2017. BSE SENSEX tested 29927 and NIFTY tested 9245. Indian stock markets will be in bullish phase and benchmark indices may test new life time highs in April 2017. Time to take profits home at these life time levels !


We advise Indian investors to book profits in Indian Stocks as SW Indian Monsoon may be deficient in 2017 i.e. June to August 2017. There is this underlying risk in June 2017.


We are recommending a very old favorite stock of ours for medium term investment - around a year. The stock is a profit making Defense PSU stock - BHARAT ELECTRONICS Ltd. Buy at dips around Rs. 150 to Rs.153.00 levels. Currently trading at Rs. 160.00. This can be a multi-bagger over the next three years. One year target - Rs. 245.00.



We were incorrect in our prediction regarding Hillary Clinton.  Gold we were BINGO !!!

We said that Gold prices will dip below US $ 1190.00 pto and that at sub US $ 1200 levels - it is a good level to start buying physical Gold in small lots. Gold prices Spot NY tested a low of $ 1178.00 on 11/25/2916 and closed at $ 1178.00 pto.


Investors can start buying physical Gold at these levels of around $ 1180.00 till $ 1050.00 pto. One could see this level of  $ 1050.00 in December 2016 or January 2017 - if Indian Government announces a total or partial ban on import of Gold Bars in order to control the deprecating Rupee parity with US Dollar.


The demonetization of INR 500.00 and INR 1000.00 denomination currency notes w.e.f. 11/9/2016 has rattled the Indian grey market economy. Slush money due to the tune of INR 14.20 trillion ( US $ 210.00 billion ) was in circulation in India as per GoI estimates as on 11/8/2016. With one master stroke - this money has become worthless paper. Huge blow to the un-accounted cash economy. Now with loop hole plugged by the GoI - Indian Banking system will be flush with funds and there will be huge surge in taxes collected by the GoI over the next six month or so. Interest rates will come down in India. Personal income tax rates may come down in India. Only 1.30 % of Indian population pay taxes. Imaging 30.00 % Indians start paying income tax in the next one or two years ? India could have a Budget Surplus !!! 


Property prices will correct seriously for another six months in India. Auto and White Goods sectors will also correct In India. 2018 - a golden year to buy property in India and 2017 - a golden time to buy Gold in India.

Indian GDP will contract by 1.50 % ( annulaized basis ) over the next 6 months. Indian GDP will start to pick up by April/May 2017 onwards.

Out of a population of 1200 million Indians - less than than 530 million Indians have access to banking sector. With the demonetization drive the Indian Government under the reformist Prime Minister Modi wants the Indian economy to be ridden of corruption and cash-based economy.


Banking sector in India will be flushed with funds over the next months as the Indian economy becomes more dependent on bank transfers and less cash transactions. There will be pain in the economy for the next six months as service providers and traders will be paid by Cheques and Bank transfer and not cash. The new 500 and 2000 INR denomination currency notes will be in the banking system in sufficient numbers over the next six months.

It will take Indian consumers about six months or so to change their purchasing habits from paying cash to paying by cards and over the internet/mobile phones/payment banks/payment apps etc


Indian equity markets also corrected as predicted. BSE SENSEX and NIFTY are trading below their 200 DMAs - 26750 and 8130. I expect BSE SENSEX test January 2016 lows of 22500 and NIFTY 6800 over the next three to four months.


INR is trading at 68.70 to a USD. We could see a level of 71.00 or even 72.00 over the next three months - if FIIs pull out about US $ 50.00 to 60.00 billion from the Indian equity markets. I feel these will be very good levels to buy Indian equities for a two year time horizons. We will mention sectors to buy into at these levels. Individual stocks - we recommend to our clients in our paid service. 



Indian Central Bank under the new Governor cut the key benchmark lending rate by 25 bpts to a record low of 6.25%. The Repo Rate now stands at 6.25% and the Reverse Repo rate is pegged at 7.25%. Indian stock markets cheered this development as cut in Repo rate will push Indian Banks to cut lending rates to Indian consumers in Home sector and Auto Sector borrowing. This is good news for Indian consumers who have access to banking !


There is tension between India and Pakistan over international borders and this could escalate. In view of this we advise Indian investors to book profits in the stock markets and buy Gold at sharp dips. Gold is now trading at US $ 1270.00 pto.

If US Fed indeed increase interest rates - one could see Gold correcting to sub US $ 1200.00 pto levels. At sub US $ 1200.00 pto levels - it is a good opportunity to start buying physical Gold in small lots.


We are predicting a historic win for Ms. Hillary Clinton as the US President in the forthcoming US Presidential elections. She will get 51.3 % vote and will be the first woman US President at 69 years of age.


There are serious problems with the banking sector in EU. DB in Germany now trades below Euro 10.00 per share. If DB collapses - there will be chaos in the banking sector in EU and across the Atlantic. This will be moment bigger than Lehman.

Advise investors to prune their exposure to European equities due to this banking sector chaos in EU which could snow ball. Gold is a sure bet for the next 5 to 6 years.

Hold Gold in physical form outside the Banking system in all parts of the world.


The update is late as we were waiting for the trend to be clear for the Indian equity markets. As predicted GST Bill as passed by both houses of the Indian Parliament after much political debate and some concessions. Our prediction was BINGO !


We had predicted that BSE SENSEX would test 30,000 and NIFTY 10,000. BSE SENSEX is near 29,000 and NIFTY 9000. Our targets will be tested in October 2016.


We are bearish in the long term for Crude Oil even if Saudis find a new bed partner in Moscow.


Gold prices will be bullish in the near term.

JUNE 2016

Global markets have recovered to pre BREXIT event levels but British Pound Sterling has been battered. Gold and Silver have rallied smartly with latter clocking better percentage gains than the former precious metal. Gold and Silver will rally further till end of this year. Our December 2016 target for Gold is US $ 1450 pto

Indian equity markets will be on fire in July 2016 as the much delayed GST Bill will be cleared by Parliament. BSE SENSEX should breach 30,000 level and NIFTY could break past 10,000 level in July. For traders this is a good opportunity to buy front line momentum stocks and make a quick buck.

Cheers to the Indian Equity markets for July 2016 !   

JUNE 2016

BSE SENSEX closed today 3rd June 2016 at a bullish level of 27000 nearly an eight month high and so also did NIFTY at 8250. Indian equity markets from here on are contingent on the progress of SW Monsoon.

Since our last post the RBI cut Repo Rates by another 25 bpts to 6.75 %. The Indian economy grew at 7.60 % in the fiscal 2015-16 – highest annual GDP growth rate. The fiscal situation was also in control with fiscal deficit at INR 5320.00 ( US $ 79.40 billion ). The next trigger for the Indian economy and equity markets is the position of the SW Monsoon. A normal SW Monsoon is bull trigger for the economy and the equity markets. FIIs will pump in money in July and August 2016 – if the Indian SW Monsoon is normal or above normal.

We still stick to our prediction that global markets will be bearish in 2016 as ^SSE COMPOSITE in Shanghai will test 2000. Chinese economy is sluggish and huge amount of stimuli by PBoC has had little impact on the economy. Brazil continues to contract. Japan is in “de-flation”. USA and EU are growing at below 2.50 % per annum.

Gold is the best bet as an investment class for the balance period of calendar 2016.

BRENT Crude Oil could at best US $ 60.00 pbbl.

APRIL 2016

We are not posting a detailed report for April 2016. We are waiting for ^SSE COMPOSITE Index in Shanghai, China to test 2100 or 2000. We predicted that we will see these levels for ^SSE COMPOSITE in Shanghai in Q1 2016, but we only saw a low level of 2656 in January 2016.

^SSE COMPOSITE Index closed today 3/31/2016 at 3000. We still stick to our prediction that ^SSE COMP will test 2100 or lower at 2000 in April or May 2016

MARCH 2016

BSE SENSEX closed today 3/2/2106 at 24243 down marginally from the last reference close of 24455.  NIFTY also closed marginally lower at 7369 against the last reference close of 7427.

SSE COMP closed today at 2850. We have predicted a level of 2100 or 2000 for ^SSE COMPOSITE WITHIN Q1 2016. Let us see how does this index move in the month of March 2016 and ho close are we to our prediction?
Union Budget was presented in India on 2/29/2016. Union Budget was pro-farmer and pro-poor man’ budget with high allocation to the sagging Agriculture Sector in India.

We had predicted that global equity markets will test further lows in February 2016 and we were accurate. The following indices tested fresh 52 week lows in the month of February 2016.

1.     ^N225 15429

2.     ^BSESN 22525

3.     ^NSEI 6823

4.     FCHI 3951

5.     DAX 8773

6.     FTSE 5596

7.      NASDAQ 4213

8.      FTSEMIB 15849

9.      IBEX 7862

10.   AXJO 4707
These indices after testing their fresh 52 weeks lows rebounded but the rally may not sustain because of the situation in China and low Crude Oil prices.

Gold is bullish as long as it trades above US $ 1140.00. Spot Gold NY closed today at $1239.00 pto. The prices tested a high of $ 1260.00 pto in February 2016.

WTI Crude oil is trading near a very critical support level of US $ 34.00 pbbl. Last trade at CME was at US $  34.80 pbbl for April contract. If prices of WTI Crude Oil fall back to the recent lows of about US $ 26.00 pbbl - then expect global equities to test further lows. Even lower than February 2016 and August 2015 lows. If WTI Crude can sustain US $ 34.00 pbbl level - then it can rise to US $ 38.00 per bbl. Geopolitical - If there is war in the Middle East - Iran and Saudi conflict then prices can zoom to US $ 60.00 pbbl.

China will spook the global equity markets and Gold prices will zoom to $ 1290.00 to 1320.00 pto. Keep a very close on the Chinese equity markets and price of Crude Oil.

We repeat the perils in the equity markets are linked to economic situation in China and Crude Oil prices. Investors to keep their powder dry and buy in deep cuts.

February 2016

We had mentioned in our last update that Chinese equity markets will correct and will play a spoil sport for bulls. ^SSE COMPOSITE corrected from 2900 levels as of 15th January 2016 to test a fresh 52 week low of 2656 as of today 2/1/2016 ( near 10 % correction ). FIIs have pulled out approx. US $ 600 billion since the past six months and the trend continues the same way.

PBoC has devalued the Yuan further and it is felt that they will let it devalue to a level of 7.00 Yuan to a US Dollar. The Chinese banks still are struggling with NPAs. The next support levels to watch for ^SSE COMPOSITE are : S1 2250  S2 2050   S3 2000 

We have mentioned in our last update that we predict a level of 2000 for ^SSE COMPOSITE. This level will create a chaos in global equity markets with a sharp cut.

Investors are advised to keep a very close watch on the extremely volatile ^SSE COMPOSITE Index  and plan their investment strategy.

Gold was bullish and tested a high of US $ 1130.00 pto NY SPOT on 2/1/2016. Gold will be extremely bullish if it trades above its 200 DMA of US $ 1140.00 pto. Investors can buy Gold if it sustains US $ 1142.00 pto for two weeks or so.

15th January 2016

We wish all our investors, associates and partners in India and around the globe a prosperous and profitable 2016 ! This December 2015 post was skipped as we were waiting to see the impact of interest rate hike by US Fed on 16th December 2016. Interest rate hike by US Fed @ 25 bpts had no impact on the US and global financial markets.

January 2016 is delayed as we waiting for the start of correction in global equities. The large correction we were anticipating in Q4 2015 is in fact underway as we post this update. Most equity indices around the globe are near their 52 week lows and a few are now in bear territory as they trade below their 52 week lows.

BSE SENSEX closed today Friday  - 1/15/2016 at 24455 down 6.50 %  from the last reference close of 26155. NIFTY closed at 7427 breaking the September 2015 low of 7546. We are bearish on Indian equities except Sugar stocks for Q1 2016.

^DJIA, NASDAQ and major European indices are also in the correction mode. They will correct further and re-test lows of August/September 2015.

Crude Oil prices tested 12 year low today. WTI March Futures 2016 tested US $ 29.13 pbbl and BRENT March 2016 Futures tested a low of US $ 29.72 pbbl. This is not a good news for global financial markets and economies. This level of crude over-supply shows a deep malaise in world economic system. Brazil is having a negative GDP growth. Resource based export economies – Russia, Australia, Latin America, Africa and GCC are all having budget deficits. Commodity indices are at record lows with levels close to the year 1991. More pain to come in 2016.   

China will spoil the party and the undergoing correction will cause further pain with our target of ^SSE COMP at around 2000 for Q1 2016. ^SSE COMP closed on 1/15/2016 in bear territory at 2884.

A stronger US Dollar may mitigate losses in ^DJIA but this leads to further lower prices of commodities and also Gold. We advise investors to allocate 15 % of funds to Gold, 15 % to Equities and balance in pure debt funds. When the global equity markets bottom out in Q1 ( we will advise ) – investors should re-enter the equity markets.

We advise investors to stay away from investment in Gold till further advise.


We are not publishing a detailed post for November 2015 as we expect a correction in global equities lead by ^DJIA in Q4 2015. This was mentioned in our last month's post.

The trigger would be the US Debt ceiling - which will need to be hiked by US Congress as we feel that in November or December 2015 - US Fed will be "out of funds". US Fed will request US Congress to raise the Debt ceiling from the current cap of US $ 18.10 trillion.


US Fed would request the US Lawmakers to hike the Debt ceiling from US $ 18.10 trillion to US $ 20.00 trillion till 2020. This is our estimate.

If this Debt ceiling request is indeed made to the US Congress with Q4 2015 - we will witness a serious correction in global equities.


Economic activity is further slowing down in China and India. All other countries are also having GDP growth issues. Gold prices have again been hammered down by speculators on the back of strong US Dollar. Almost all counties in the world are talking about further stimuli for there economies. Too much cheap money floating around in the world and hence equity markets were buoyant in October  2015.


We still stick to our prediction that US Debt ceiling will be hiked in November or December 2015. Hence we are bearish on global equity markets including India. Gold may spike if what we have predicted does happen within Q4 2015.


BSE SENSEX closed today Friday - 9/30/2015 today at 26155 down marginally from the last month’s reference close of 26283. NIFTY closed at 7949 down slightly from last reference close of 7971.
We were bang in our predictions that global equity markets would correct sharply between 1st to 14th September 2015. Global equity markets especially – the US equity markets and Asian markets corrected sharply on 7th and 8th September. US benchmark indices in fact tested their fresh 52 week lows. Indian markets tested their near 15 month lows. The BLACK MONDAY was in fact on 7th September instead of 14th September as predicted. The details of some important global benchmark indices and their fresh lows tested on 7th and/or 8th September are as under :      

Intra day fresh *lows in September 2015 for  a few important equity indices were as follows :
^N225 =  *17416. Lowest close since 1/1/2015. Year’s gains wiped out.
^HSI =  *20525 on 8th Sept – new 52 week low.                 
CAC 40 = 4230  
DAX = 9338   
FTSE = 5768 
MIB ITALY = 20,158
^DJIA = *15,379 very close to 15370 which is a 52 week low. ( 200 DMA is 15334. Any closing below this level will be very bearish for US Equities )
S & P 500 = *1867
NASDAQ COMP= *4292        
BSE SENSEX = *24856 on 7th Sept. Fresh 52 week lows. This is a 15 months low for BSE SENSEX.
NIFTY 50 =  *7546
^SSE COMP = 2851
^ AXJO =  *4989 - blood bath in Australian Equity markets  

P.S. : *Lows are lower than those of BLACK MONDAY’s low of 8/24/2015. Please refer to last month’s update wherein the lows tested on 8/24/2015 were mentioned. The above lows in red are lower than those tested on 8/24/2015. Rest indices – the levels tested were close but not breached. ^DAX is Frankfurt corrected the most in EU due to VW scandal.
Equity markets globally for very volatile in September 2015. Equity markets around the world recovered from the above lows in the last couple of days of the month. We feel the above fresh lows as above will be breached and the lows of 24th/25th August 2015 will also be breached in October through December 2015 for the respective few global equities as discussed above.

Although all the negative news globally is priced in the respective global equity market indices – there is one major issue which could spook the US equity markets very seriously. That issue in revision in debt ceiling which needs approval from the US Congress, which has Republicans in majority. US Fed will soon run out of funds and it needs to borrow more to keep US economy afloat. There could be a US Govt shutdown well in October 2015, itself - as we feel that US Fed will be “bankrupt” again in October or November 2015. Repeat saga as of August 2011 ?

On 2nd August 2011 US Congress approved a package to increase the US total federal debt ceiling to US $16.64 trillion from US $ 14.64 trillion. It was estimated that this enhanced debt ceiling will be sufficient till September 2013. US total federal debt now stands in excess of US $ 17.00 trillion and is still rising.

US Fed will need to print more money – Cash, US Bonds and E-money to the tune of US $ 1.7 trillion to run the US economy till 2018. This is our conservative estimate. The amount could be more. This is the negative news which is a biggie. US Govt has shut down a few times in the last two decades but re-opens for business when the debt ceiling is raised. 

A 13 % shortfall  in SW Monsoon in India as compared to long term annual average was confirmed by IMD, New Delhi as on 9/24/2015. IMD was very close to its earlier forecast of 12 % deficit of the long term annual average SW Monsoon. This means that Indian economy faces a “second year of consecutive drought”. Last year FY 2015 was also a drought affected.  This fiscal FY2016 will also be drought affected. This is not good news for the Indian economy as drought leads to a big strain on marginal farmers in India. Farmer suicides are a cause of serious concern in Central and South Central India.

RBI cut Repo Rate by 50 bpts to 6.75 %. This was greeted with cheers by investors in Indian equities.RBI has enhanced the investment limit by FIIs in Indian Sovereign Bonds (G-Secs) by a additional Rs. 1.70 trillion over the next 30 months. This is another welcome step towards the reform agenda of the GoI. RBI has slightly lowered the GDP growth figures to 7.60 % instead of 7.80 % for FY2016. This still makes India the fastest growing economy in the world ahead of China.
FDI figures compiled by FT Data, London for H1 2015 show India as the largest recipient of Greenfield FDI in the world ahead of USA and China. The estimated FDI figure for India for first six months of calendar 2015 as per FT Data is US $ 31.00 billion. This is a big positive for the Indian economy. Equity markets in India were bullish on this news also as India could well end up in excess of Greenfield FDI at a figure anywhere between US $ 45.00 to US $ 50.00 billion by December 2015. Indian markets may correct with a lesser beta than its peers in the emerging markets and other global markets on the back of all the above positive news from India. But there is a word of caution – there are fund outflows from the Equity basket in the emerging market universe since the past two months.     INR tested intraday a fresh two year low at 66.8550 to a US Dollar on 9/7/2015. Earlier low was 66.7325 tested in August 2015. India is making Crude Oil payments to M/s. NOIC, Iran in two tranches of US 1.40 billion each. Hence INR was under pressure versus US Dollar in early September. However INR recovered against the US Dollar today at 65.50.

India slapped “safeguard” import duties of 20 % on certain grades of HR Coils being imported from China and Russia for a period of 200 days.  China is also dumping Truck radial tyres in the Indian market since years but there is no “safeguard duty” yet on these tyres which constitute about 30 % of the Truck radial tyre market in India. The ATMA has given a petition to the Indian Govt for announcing a ‘safeguard import duty’ on Truck and Car radial tyres from China.
Indian exports dip 20.66 % in August to US $ 21.26 billion mom/yoy. Indian imports too dip by 9.95 % to US $ 33.74 billion in August. Trade deficit widens to US $ 12.47 billion. Gold imports in India zoomed by 140 % to $ 4.95 billion in August 2015. Indian exporters need to make an extra effort to boost exports. Low Crude oil during September were a boon for the Indian economy. We predict that Brent Crude could test US $ 35.00 ppbl by December 2015.         
Spot Gold closed today at US $ 1115.30 slightly lower from last reference close of 1135.00 pto. Monthly low and low for Gold were – NY Spot Gold Low $ 1097.10 and $ 1158.20 pto. A few Central Banks in CIS, Asia, Russia and Turkey are buying physical Gold as prices are attractive. Russian Central Bank bought 31.1 metric tons of physical Gold in August 2015. In May 2015 Russia bought 30.0 mt of physical Gold. India, Russia and China understand physical Gold ?
US Fed kept interest rates unchanged on 9/17/2015. The reason was shaky world economy and China issues.. US Fed Reserve decided not to change the short term interest rates keeping them between 0.00 to 0.25 %. US Fed cited too much turmoil in the international markets. A slowing China, Recession in Canada, Stagnant Eurozone and Low inflation in the US ( especially in the energy sector ) and Deflation in Japan. This sent some equity markets in Asia end in on a positive at close on 9/192015 but equity markets in EU and USA  ended in the red on 9/20/2015. Crude oil and base metals corrected on 9/20/2015 with latter with a higher beta.   

ECB decided to hold interest rates at record low of 0.05 %. QE @ US $ 67.00 billion which ends September 2016 could be extended as per Mario Draghi.   Growth and inflation have been downgraded by Draghi and he might increase the QE in quantum exceeding US $ 67.00 billion/month and also extend the timing – beyond September 2016.This announcement lead to the major European indices to correct slightly on 9/4/2015.
S&P in a surprise announcement on 9/10/2015 downgraded Brazilian Sovereign Debt rating from BB to BBB-. This means Brazilian Sovereign Debt is downgraded by S & P to from “investment grade” to “junk status”. This was a trigger again for EMs equities to correct.   Brazilian Real fell to 3.9061 to a US $ on 9/10/2015 – a 52 week low.  Real is the worst performing currency in EMs. Real has fallen by 30 % in the past one year. GDP shrunk by 2.30 % in April-June quarter. Brazil is in worst recession in 25 years. ^BVSP is down 20 % since May 2015. ^BVSP will be extremely bearish in Q42015 as commodity prices of base metals are further sliding. Iron ore, Zinc, Copper and Aluminium are at fresh six year lows where as Iron ore prices are near a decade low. All mining majors in Australia, Brazil, Canada etc are struggling to stay afloat as they have huge debts on their books and their revenues are seriously hit. One might see one or two mining majors bankrupt in Q4 2015 if commodity prices do not improve in the next six months. GLENCORE shares fell near 30% in a single trading session on 9/29/2015. BHP, RIO TRINTO, VALE etc are all in trouble due to high leverage and poor revenues. Massive lay-offs of labour and staff is expected from these mining majors in the next months as per our estimates.
China continues to haunt global investors as growth is slowing down considerably. PBoC and affiliates have pumped US $ 339 billion to shore-up the stock markets directly in Shanghai and Shenzhen since July to August 2015 as per JP Morgan.  July PPI was down in China to 5.9 % against estimates of 5.4 %. This is 42 months of consecutive PPI decline for China. China has a huge challenge as it transforms from an export lead economy to a domestic consumption economy.  ^SSE COMP was very volatile but could not breach the low 2851 tested in August 2015. Chinese announced CAIXIN PMI 47.0 versus 47.5 as expected for August 2015. This is a six and half year low for PMI in China. Chinese manufacturing contraction for Q2 2015 was the worst contraction since 2008. This spooked the global equity markets again towards the end of September 2015. Chinese GDP growth in our view will be sub 5.00 % in calendar 2015 although official figures from PBoC might be announced at near 7.00% in early January 2016. We estimate Chinese GDP growth in calendar 2016 to be near 4.00% only. This will have an impact on commodity prices globally and also equity markets in 2015 and 2016.  

^N225 also weak as Japanese economy further slows down. Core machinery orders fell by 3.6 % in July against expectation of a hike of 3.7 %. Hence ^N225 corrected in Osaka in early September but could not breach the low of 9/8/2015.
There is too much happening around the globe but US and EU economies show some positive growth. We expect that global equity markets will tank once more in October or November 2015 and indices will breach the lows tested in August and September 2015. Indian equities will also correct but with a lesser beta as India now is the fastest growing economy in the world with annual estimated GDP growth in excess of  7.50%

The pivot levels to watch for BSE SENSEX and NIFTY for October are : 

R1  26680    R2 27180   R3 27680      
S1  25800    S2 25000   

R1 8080   R3 8230  
S1  7800    S2 7580 

If BSE SENSEX closes below 24850 for two weeks then it will slide to 24000 levels or lower to 22500 levels. NIFTY corresponding will be 6800. These levels will be tested if there is a crash in global equity markets as per reasons mentioned later in this update. These are good levels to buy Indian blue chip large caps and mid caps for a 2018 scenario. 
We expect Gold prices to be bearish if it cannot trade above the technical level of US $ 1180.00 pto. BRENT Crude Oil prices can correct to US $ 35.00 pbbl in Q4 2015.
We advise global equity investors to be very cautious on account impending US Debt situation and consequences thereof. If traders are expecting equity markets to be bullish – please hedge your long positions as we do not know the timing of this black swan event of US Debt ceiling raise stalemate.
We are bearish on Equities, Commodities and Bonds for Q4 2015. There could be a massive correction due to factors in China and USA as mentioned above.



BSE SENSEX closed today on 31st August 2015 at 26283 down 6.52 % from the last month’s reference close of 28115. BSE SENSEX closed below its 200 DMA of 27680. This is bearish signal for the near future. NIFTY closed today at 7971 down about 6.00 % from last month’s reference close.


The levels to watch for BSE SENSEX and NIFTY are as follows :


R1  26680    R2 27180   R3 27680       

S1  25800    S2 25000    


R1  7810    R2 8080   R3 8230   

S1  7800    S2 7580  


We were correct in our predictions that Global Equities including Indian Equities will be bearish in the month of August 2015. China and Brazil spoilt the party !

We are reproducing  excerpts from our 5th October 2007 – webpage as under :



I am advising investors to exit from the equities. Investors who hold blue chips for “keeps” can sell the same in the ‘F & O’ window so as to avoid erosion of capital. Invest in Gold and/or sit on cash






We predicted a major correction in global equity markets on 5th October 2007  for  2008 and advised investors much in advance. We advised investors to invest in Gold or sit tight on cash. We all know global equity markets corrected by about 25 % in January 2008. Then the markets corrected from July 2008 to September 2008 ( Lehman Bros crisis )  


We were also partially correct on Greece political scenario. PM Tsipras resigned after getting Euro 86.00 billion bail out from ECB and EU. IMF did not participate in the third bail out as it feels Greek Debt is unsustainable.   There is a political chaos in Athens with no Govt in place till 20th September 2015 when there will be fresh elections. FITCH feels that with the new Govt without  Tsipras as PM – what is the guarantee that the new Govt will honour the terms of the Euro 86 billion bail out ? Very difficult to answer this query from FITCH ?


The monthly high for BSE SENSEX and NIFTY were 28316 and 8592 respectively. On 24th August 2015 global equities markets crashed including India. Traders called it a “BLACK MONDAY”. BSE  SENSEX tested a intraday low of 25625 and NIFTY tested a low of 7769. At close on 8/24/2015 BSE SENSEX had lost whopping 1624 pts and NIFTY lost 490 pts.  SENSEX and NIFTY fell by nearly 5.90 % each at close. It was the worst daily fall in BSE SENSEX and NIFTY since 2008.    


Intra day lows on 8/24/2015 and 8/25 for some important indices were as follows :


^N225 = 17747

^HSI = 20,865                    

CAC 40 = 4230

DAX = 9338

FTSE = 5768

MIB ITALY = 20,158


^DJIA = 15,379

S & P 500 = 1867


BSE SENSEX = 25298

NIFTY 50 = 7667

^SSE COMP = 2851


The first trigger for correction in the global markets was Chinese Equity markets. This had worldwide impact.  Chinese Govt could not stop the crash in the Chinese equity markets even with direct purchase of equities through PBoC and Pension Funds. The latter is hara-kiri as per our analysis. In mid August PBoC stunned the world by Devaluing Yuan – three times against the US Dollar to fix the peg at 6.3306. The PBoC devalued the Yuan by 4.50% against the US Dollar in three consecutive days. There was a global impact on currencies and commodities including Crude Oil as they further corrected to new lows. The US Dollar soared in August 2015.


^SSE COMP lost another 8.49 % on 8/24/2015 at close- this was the single largest daily fall in ^SSE COMP in its history – to close down by 8.49 %. Black Monday – 24th August 2015. Again ^ SSE COMP closed on 8/25/2015 at 2965 down 7.63 %. There was a panic in China and global equity and commodity markets –serious cuts were witnessed. Details of levels of some important global equity indices testing their multi-year lows is as per above. PBoC panicked to calm down Chinese Equity markets.


Even with the devaluation of Yuan - the ^SSE COMPOSITE was not buoyant. ^SSE COMP breached the important 3000 level and tested an intraday low of - 2851. The PBoC swung into action on 8/27/2015 and announced – cut in interest rate for one year tenure, cut in RR ratio and announced liquidity induction of US $ 200.00 billion (equivalent Yuan ) through two main Chinese Banks. There was calm at the Shanghai and Shenzhen equity markets today as ^SSE COMP closed today at 3206 after recovering from a whopping monthly low of 2851.  


Chinese authorities may let CNY slip to these levels of 6.45 to 6.66 to a USD. The might US $ moved up almost against all currencies in the world specially currencies of EMs.

On Black Monday (8/24/2015) ^DJIA also tested an intraday low of 15379 – down whopping 1081 pts on 8/24/205, but recovered to close today at 16528 (down 3.94 % ). S & P 500 also corrected to a low of 1867 but recovered to close was 1893 (down 5.48%). NASDAQ COMP tested an intraday low of 4292 but recovered to close at 4526 (down 3.82%).   

Foreign investors pulled out US $ 190.00 billion in the last 7 weeks from China, primarily from the Equity markets. US $ 90.00 billion were pulled out in July 2015 and in three week ending 21st July 2015 – US $ 100.00 billion have been pulled out by the FIIs. They are a bit disturbed over authenticity of Chinese data especially on the annual GDP growth figures. China announced its GDP growth for Q2 2105 at 7.5 % but global economists feel that China is growing only at 4.00 to 5.00 % only. Plus the devaluation of Yuan gives an indication of pressures in China.

Three major European Equity markets fell by about 5.00 % at close ( CAC, DAX and FTSE ) on 8/24/2015. Europe STOXX was down by 7.33 %. These indices recovered at close today.

GD.AT in Athens opened for trading on 8/4/2015 and the index crashed to a new decade low of 615 and was down 22.93 % at the opening of trade after a five week break till the close of the trading hours. This was the biggest daily fall in GD.AT after Greece became a member of EEC. GD.AT corrected again on 8/24/2015 by 10.67 % to a multi year low of -568 but recovered to close at 624 today.

South African Rand crashed to 13.80 to a USD on 8/24/2015. Rand was worst performing currency in EMs after Brazilian Real. Brazilian Real was hit today to test a low of 3.6823 level against the US Dollar -which is a multi year low. Brazil is now officially in recession. There is a threat to its Sovereign Bond rating be cut to junk status by global rating agencies as Brazil faces a tough fiscal imbalance. Plus there is the China effect also in play – as Brazil exports iron ore and other metal ores to China. Chinese imports are down as its economy is slowing down.     

INR tested to a low of 66.7325 of closed at 66.645 on 8/21/2015. This is fresh one year low for the Indian rupee. INR recovered to close today at 66.4487 

Gold moved up to USD 1171.10 pto at NY Spot on 8/24/2015. This was a 5 week high. Gold closed today at US $ 1135.40 up 3.58 % from the last month’s reference close of US $ 1096.20 pto. We remain bearish for Gold in September. Unless Gold starts to trade above US $ 1183.00 pto it will be bearish. Hence Gold should be bought only is it sustains US $ 1183.00 pto

Crude Oil prices corrected about 27.00 % in August 2015.      

   ENT Crude Oil February 2015 futures tested a six year low of $ 45.19 pbbl on 1/13/2015 at London ICE – lowest since April 2009. October 2015 futures tested a low of $ 42.23 at ICE on 8/24/2015. BRENT can test a level of US $ 40.00 pbbl in the next few months. BRENT October futures closed today at 53.97 pbbl 

   WTI Crude Oil April 2015 futures tested a six year low of  $ 42.51 pbbl on 3/18/2015. This was the first time since April 2009 that WTI Crude Oil futures were trading at levels of below $ 50.00 pbbl. March 2015 levels were breached in August 2015. October 2015 futures tested a low of $ 37.75 ppbl at CME on 8/24/2015. A fresh 6 year low. WTI and BRENT have fallen for 8 straight weeks in the international markets – at CME and ICE respectively. This is biggest losing streak since 1986.  WTI can test a level of US $ 35.00 pbbl in the next few months. October 2015 futures closed today at 47.30 pbbl

India’s corporate sector had one of its worst years in the fiscal year that ended in March. Industrial output grew by a modest 3.2% year-on-year in the quarter through June 30 compared with 4.5% in the same period last year. GDP data for the quarter is due Aug. 31, but on Aug. 17, Moody’s Investors Service reduced its GDP growth forecast for the current fiscal year to 7% from 7.5%, citing a near 10 % deficient SW Monsoon season and slowing momentum for reform. The Indian Govt announced its GDP growth figures Q1 FY2016 at 7.00 %.

We are again cautioning global investors to take profits home in equities or even book losses in equities and sit on cash. There will be a “tsunami” in the global equities and commodity markets in September through December 2015. The above lows mentioned in the update will be breached and one will see much lower levels. We will advise accordingly when to start buying equities.

Investors are advised to square their long positions on all commodities including Gold. We will advise via special updates when to start buying physical Gold.

Global equity markets (including India) will correct savagely from 1st September 2015 to 14th September 2015 and so also commodities. Hard Commodities are already near their six or seven years low. Gold may rally in the said period but will again be hammered down by global bear cartel.


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