The Gate of the Hell

The Gate of the Hell

Dear folks if you are bull on economy and stock markets and if you had not read our last blog then you must be finding yourself standing in front of the gate of the hell. As per our last blog we did had asked bulls to exit long profitable positions and we expected return of bears which is what we really are feeling in the markets.

 Bears have successfully broken 200 DMA on S&P and if it remains below it is expected to fall to 1290.Our darling Dollar is seeing comeback and we at wiTdom had always remain in love with Dollar. Dollar Index is above 81 if it crosses above 82 then this gate of hell will be open for the bulls by the bears.

We gave Exit call on long position when Nifty was some where near 5850 and sensex was at 19000 and by our knowledge these where the recent highs for the markets.

Fiscal cliff, Tax and Subsidies are the new problems which America will be struggling to overcome in coming days. In India and else we see ca-pex cycle slowing and business confidence at very low level. Unemployment is very high and business leaders are in no mood to invest in there business. We are very sure that Europe is going to bust in coming days

Now it’s to seen how aggressive bears get to break important support levels and make this market free fall. If  Nifty stay below 5580 and 5410 then it can fall way back to 4780.

But bulls are gone fight back and try to save themselves but we think its advantage bears.

Thanking you

Atul Sikrai

Vice President

wiTdom investment advisory.

 http://satango.blogspot.in/2012/11/monkey-business.html

http://knowlezhrbanco.blogspot.in/2012/11/knowlez-is-power.html

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Toxic Structral Isuues

Toxic Structural Issues

With the blessing of Lord Ganesha as projected in our last blog we expected tactical technical rally and stock index has moved up more than 15% and stocks in specific has moved up in range of  40-90%.

We suggest our readers to book this humongous gain. As structural issue within the economy still exist and all is not honky dory.

During a period of strong global growth, growing capital flows, and prolonged stability earlier this decade, market participants sought higher yields without an adequate appreciation of the risks and failed to exercise proper due diligence. At the same time, weak underwriting standards, unsound risk management practices, increasingly complex and opaque financial products, and consequent excessive leverage combined to create vulnerabilities in the system. Policy-makers, regulators and supervisors, in some advanced countries, did not adequately appreciate and address the risks building up in financial markets, keep pace with financial innovation, or take into account the systemic ramifications of domestic regulatory actions.

We at witdom expect lots of toxic assets within our financial system.

Spain banking system is in deep trouble. From our sources we come to know biggest Real Estate players in Spain may go bust any time. Fiscal cliff problem in America will come as big negatives in coming days. We sound bearish and cautious on financial system for coming days.

Thanking You

Atul Sikrai

Sr Vice President

Witdom investment advisory

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Tactical Technical Rally

And that folks is the real question. Are we in a new secular bull market, or just a tactical rally within a trading range stock market that we have envisioned?

During times of high volatility and great economic uncertainty, it pays to remember that stocks represent partial stakes in operating businesses. Therefore, as long as the businesses you own are producing satisfactory results, it is best to ignore the market’s temporary appraisal of your holdings. It is worth noting that during secular bull-markets, stocks outperform bonds and cash.

A secular bull market has to be backed by a productive driving force... a new technology or industry that employs people, expands real production, and increases standards of living. We have seen none of that since 2000. Both the housing bubble and the current stock rally have been liquidity-driven, not productivity-driven. Until the next big technology takes root, we are destined to see repeated cycle of large rallies followed by failure to lower lows, and the efforts of the Fed & ECB to counteract the nature forces of recession will do nothing but accentuate those swings.

Since (unlike some people and/or groups) I tend to buy low and sell high - this hurts me how???? Every completed cycle sees my portfolios larger. Even if the system crashes - dividends tend to stay ahead of inflation. - Dividends were one of the very few things that were able to stay relatively ahead. My Portfolios will also do well in this environment. Even a secular Bear has quite a few up cycles in it - it is not really a problem IF you are prepared. As I said before "Bear markets simply put good stocks on sale." I believe this is a quote from "The Contrarian Investment Strategies" and is fitting at this point.

last few years??? I do not know about how anyone else did .The dividend paying stocks that I bought on sale were largely responsible for this performance. By the end of the year - not only was I ahead, but my portfolios had hit a new high and are still hitting new highs this year with no (or very little - I would have to check to make sure) cash added from my pocket.

Out of my being curious - what kind of hedges do you use? My main "hedge" is my trading portfolio.

Thanking You

Atul Sikrai

Sr Vice President

WiTdom investment advisory

Pandora Box Of Financial Worms

Pandora Box of financial worms:

"Open a can of worms" metaphor is a modern extension of Pandora's Box. In the original story, a mortal was warned not to open a box belonging to Pandora. When curiosity got the best of this mortal, she opened the box and inadvertently released numerous plagues on the world. According to legend, the only thing remaining in Pandora's Box was a creature called Hope. In this same sense, to open a can of worms means to release a host of often irrevocable problems or complications. As long as the "can" remained sealed, there would be no harm or foul.

Financial stores routinely sold cans of worms and other popular live baits to humans, who often discovered how easy it was to open a can of worms and how difficult it was to close one. Once the worms discovered an opportunity to escape, it became nearly impossible to keep them contained.

The ramifications of the LIBOR scandal (what Warren Buffett glibly called a can of worms) grow by the day. Criminal indictments of individuals, even if firms are too big to indict, appear to be in the making, as the tsunami's shock waves are about to spread to many of the usual suspects. One can only imagine the trial lawyers licking their chops.

Central bankers and regulators, understandably panicked at the height of the crisis, may have been complicit in some of the distortions in an effort to create the pretense of financial system stability. However, like the so-called "war on terror," we find the war on financial system collapse is filled with ends-justifying-the-means moral and legal questions.

LIBOR has become the central grid of the global financial system, directly or indirectly linking the vast majority of savers and borrowers across markets and national boundaries. It also links risk transfer via the multi-hundred-trillion-dollar global derivatives markets. And don't believe the experts when they say this is "only" a short-term interest rate. Three-month LIBOR is the foundation of the term structure of interest rates; a change in LIBOR changes the forward rates by simple arithmetic.

Thanking you

Atul Sikrai

Sr Vice President

wiTdom investment advisory.

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Euro Ray Of Hope ?

Shares are set to surge, with appetite for risk assets seen rising after European leaders agreed on a supervisory body for euro zone banks and to allow them to be recapitalized directly by the rescue fund without adding to government debt.

But I'm a bit still cautious as we have seen the cases where different leaders later say different things and we find out that there remain disagreements. As a result, the greenback (Dollar) is expected to slip against the Yen, Euro and Indian Rupee.

High-beta currencies like the Australian dollar, which shall enjoy a surprise short-covering rally. These gains on the euro zone news.

European leaders agreed on Friday to create a single supervisory body for euro zone banks and allow them to be recapitalized directly by the currency area's rescue fund without adding to government debt.

Still, there was a degree of skepticism with me waiting for more clarity about the measures agreed. I want to point to considerable execution risks in the move to empower the ECB with a supervisory role that could prove to be contentious. Besides, the market would soon start to question whether the euro zone's rescue fund has enough resources to recapitalize banks and buy peripheral bonds given the huge debt liabilities of both Italy and Spain.

Thanking You

Atul Sikrai

Sr Vice President

wiTdom investment advisory

Zombie Banks.

As per our last blog stock market around the world went up.

We think that temporary up move is now over .We are expecting another round of sell of coming. Economic outlook still remains weak. We suggest you to book profit on all your long trade. Professional traders can go short.

Let’s talk about zombie banks in our banking system around world.

Here’s a simple explanation for why the world’s zombie banks remain so reluctant to write off worthless assets. wiTdom still see a huge hole in the banks’s books that its executives have yet to admit. Had zombie banks taken swift action sooner to mop up and replenish its balance sheet, it might not be in the precarious position it is today.

Other struggling lenders in Europe and the U.S. will see both examples as more reason to paper over their losses, which will make their problems and the eventual cleanup worse. Delay- and-pray is never a good strategy. Unfortunately it’s the only one a lot of zombie banks have left.

Some of the Zombie (Scary banks) is yet to be unearthed. We see lots of trouble in Euro zone. We expect S&P to fall to 1280.You can also go short on Nifty with SL of 5255.

Nifty is expected to fall back to 4780 if 5000 is broken. Bear case for Nifty is supported because rain has been delayed and is expected to be below average. Inflation is still the concern. No rate cut by RBI .Fed kept its gun powder dry. Absence of QE3 is end to near term up move in speculation.

Thanking you

Atul Sikrai

Sr Vice President

wiTdom investment advisory.

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Where there is will there is Way!

Pooling Euro Zone Bad Debt

Where there is will there is a way!

Germany has indicated that it is prepared to accept a grand bargain that would provide greater support for its most indebted euro zone partners in exchange for far more centralized control over government spending in Europe. More likely is a plan to combine much of Europe's bad debt into a single fund, with the idea of paying it off over 25 years -- an idea gaining traction in Germany as an alternative to euro bonds, officials say. Changes on this scale would not be easy, involving an arduous process of treaty alterations that could take years, and it is unclear if they would be enough to reassure markets of the euros stability.

  Nifty has formed short term bottom near 4780.We are  suggesting to close all short position with profit and go for adventurous Long on Nifty. Nifty expected to jump towards 5130-5200 in near term future .Things that make us  bullish on nifty is that government is coming back with some reform for growth. RBI expected to cut rate in future. And very important factor is that Rain God has arrived in India.

Now this blog is ray of hope for bulls.

After reaming bearish for last three month we feel markets are showing some near term bottom out stage. Markets around were falling from last 3 months we expect some up move in near term. ECB is expected to cut rates. Even Fed will come to rescue market with help of QE3.

Thanking You

Atul Sikrai

Sr Vice President

wiTdom investment advisory.

Pooling Euro Zone Bad Debt

Where there is will there is a way!

Now this blog is ray of hope for bulls.

After reaming bearish for last three month we feel markets are showing some near term bottom out stage. Markets around world were falling from last 3 months we expect some up move in near term. ECB is expected to cut rates. Even Fed will come to rescue market with help of QE3.

Germany has indicated that it is prepared to accept a grand bargain that would provide greater support for its most indebted euro zone partners in exchange for far more centralized control over government spending in Europe. More likely is a plan to combine much of Europe's bad debt into a single fund, with the idea of paying it off over 25 years -- an idea gaining traction in Germany as an alternative to euro bonds, officials say. Changes on this scale would not be easy, involving an arduous process of treaty alterations that could take years, and it is unclear if they would be enough to reassure markets of the euros stability.

  Nifty has formed short term bottom near 4780.We are  suggesting to close all short position with profit and go for adventurous Long on Nifty. Nifty expected to jump towards 5130-5200 in near term future .Things that make us  bullish on nifty is that government is coming back with some reform for growth. RBI expected to cut rate in future. And very important factor is that Rain God has arrived in India.

Thanking You

Atul Sikrai

Sr Vice President

wiTdom investment advisory.

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Humpty Dumpty S&P and Nifty!!

With the blessing of lord Ganesh  wiTdom again got it right ! Just refer our march end blog about “Operation Evil Cat “.

Didn’t we tell markets are going to crashed?

Yes equity and commodity prices around the world have tumbled down. We did had warned Nifty will get to 4600.

Today nifty was near 4700 very close to our target of 4600.Rigid bulls around the world are running to cover their foolish long positions. IF you are regular reader of our blog you must have noticed that wiTdom was only firm that was bullish on Dollar and yes today dollar rupee is very close to 55 and dollar index is very near 82.Just watch for dollar index it has resistance near 82 if it crosses above it then no one on earth can save equity and commodity bulls.

Its proud moment for our fans, followers and readers to tell to the world see we told you operation evil cat was coming!!

Now let me tell you the secret how we predicted this fall also ….

First we were smart enough to measure leveraged level within financial markets.

For you kind information we want to reveal to you that ECB is 38 times leveraged it’s very close to Lehman default in 2008.We where very sure that ECB has lost its gun powder to save euro zone. We where very sure that euro is in deep trouble. Second thing we are betting was on our astro knowledge let me tell that we knew that from 16 May shani was getting vakri and its going to remain vakri till 4 august.

Our analysis is based on technical, fundamental and astro knowledge. And that’s why we are getting it right often.

In wiTdom the world trust !

Still thinking investment? Think wiTdom !

Thanking you

Always yours

Atul Sikrai

Sr Vice President

Witdom investment advisory.

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ECB Coeure

Spain, Pain & Sprain………
PIIGS : Portugal, Ireland, Italy & Greece.
PIIGS is really going through pain. And now core area of pain is Spain.Europe contagion now spreads to Spain and Portugal. Suicides case in Portugal at all time high.
This proves that people in Europe are not happy. So how can economy do well when people are not feeling good? With Spain’s three-month-old government struggling to reduce the budget deficit and crack down on overspending by regional administrations, borrowing costs have surged, nearing the levels that precipitated bailouts for Greece, Portugal and Ireland. Spain may “aggressively” tap support from the ECB instead of seeking a bailout. European Central Bank Executive Board member Benoit Coeure triggered speculation that the bank will revive its bond-purchase program to lower Spain’s borrowing costs as the region’s debt crisis threatens to boil over again.
We expect a very significant intensification of the euro- area debt crisis to materialize this quarter as the market refocuses on the fundamentals and the fiscal challenges of each country. Would Spain won’t need a bailout and will regain investors’ trust with the deepest austerity measures in three decades, including spending cuts and tax increases?

Our view for market is still bearish. Nifty is having a strong support at 5135.Nifty expected to trade in range of 5135 to 5350.

Thanking You

Atul Sikrai
Sr Vice President
wiTdom investment advisory.

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Operation Evil Cat.

Now Bears are going to love this blog. We at wiTdom are predicting that worst is yet to come .After evaluating macro and micro economic situation we feel that economy is still not out of the woods. Problems in Europe have not been resolved but panic is just been delayed by liquidity injection by ECB. Hard landing in China is here to stay being a growth engine of the world any slow down indication is going to jolt the growth of world economy. We expect that by early 2014 all commodity prices and asset prices are going to touch new lows. Any where in end of 2013 we may see new low on stock markets around the world which will be below 2008 lows. Now each one of you know that 13 is evil and cat is going to create lots of pain and anger on living being on earth. American economy is improving and stands at much better poison so our love for dollar still stays intact.
Our view for Nifty and sensex is negative .The New General Anti-Avoidance Rules (GAAR) provisions which will be applicable from April 1 2012, will see large scale selling pressure from Foreign Institutional Investors, with markets still unclear on the impact of the provisions. It may be recalled that Union Budget 2012-13 had provided for GAAR, following the Vodafone Supreme Court verdict in favor of Vodafone. FIIs will sell heavily on fears that the Union Government may raise tax demands as a result of these provisions. It is now believed that P-Notes through which billions of dollars flow into stocks will now be taxed. Any closing below 5160 can take Nifty to low of 4500 if 5080 is breached. We expect lots of selling by Hedge fund community in coming days.

Thanking you
Atul sikrai
Sr Vice President and Head of Equities
wiTdom investment advisory.

wiT + wisdom = wiTdom

Wit + wisdom = wiTdom
Can you concisely summarize your investment philosophy in a few sentences? My experience is that most people can't. The quotes that follow are diamonds that offer a real powerful education in the world of Risk Management. They have had a profound impact in my life. I pass them along hoping they achieve a similar effect on your investments. Enjoy!

1) "Rule No. 1: Never lose money. Rule No 2: Never forget Rule No. 1." -
2) "Large profits can be made in common stocks. Large losses can be made in common stocks."
3) "A fool and his money are soon parted."
4) "A fool and his money were lucky to get together in the first place."
5) "You should invest in a business that even a fool can run, because someday a fool will."
6) "The key in life is to figure out who to be the bat boy for."
7) "Let Wall Street have a nightmare and the whole country has to help them get back to bed again."
8) "There are two fools in every market. One asks too little, the other asks too much."
9) "The elements of good trading: (1) cutting losses, (2) cutting losses, and (3) cutting losses. If you can follow these three rules, you may have a chance."
10) "That market doesn't care whether you are IN or OUT! With that being the case, my question is who are you competing against? Most people will answer 'everyone else' my response is 'look in the mirror.'
Thanking You
Atul Sikrai
Head Of Equities
wiTdom investment advisory.
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Credit Event

Credit Event:
Greece Default at last it has happened. Thanks God its orderly default and not disorderly default.
This is what financial expert around the world where waiting for and atlast it has come true that Greece is declared bankrupt.
The ISDA said the use of "collective action clauses (CACs) to amend the terms of Greek law governed bonds issued by The Hellenic Republic such that the right of all holders of the Affected Bonds to receive payments has been reduced.” The "credit event" ruling means a maximum of $US3.16 billion of net outstanding Greek credit default swap contracts could be paid out, though the actual amount is likely to be lower because bondholders are not losing all of their original investment .ISDA said the auction will be held to determining the actual payout amounts on March 19.Greece said it would use the newly passed legislation that included the CACs to force private creditors into a bond swap. This follows creditors' voluntary tendering of 85.8 percent of the 177 billion euros in bonds regulated by Greek law. The use of CACs should boost participation to an estimated 95.7 per cent.

Credit default swaps tied to Greek sovereign debt have been triggered.
Dollar is expected to strengthen from here .We expect Dollar Index to resume its up move once again.

Thanking You
Atul Sikrai
Sr Vice President
wiTdom investment advisory

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Golden cross

As long-term indicators carry more weight, the Golden Cross indicates a bull market on the horizon and is reinforced by high trading volumes. Additionally, the long-term moving average becomes the new support level in the rising market. Technicians might see this cross as a sign that the market has turned in favor of the stock.
A crossover involving a security's short-term moving average(such as 50-day moving average) breaking above its long-term moving average (such as 200-day moving average) or resistance level.
--S&P 500's 50-day moving average crosses above 200-day moving average
--'Golden cross' is thought to mark transition to bull market
--Previous golden crosses preceded material gains over next two months

The Standard & Poor's Composite Index of 500 stocks posted its biggest January point gain in its history. But what may be technically more important for the longer-term outlook is that the S&P 500's 50-day moving average, or 50 DMA, crossed above the 200 DMA for the first time since Aug. 11, 2011.

Many chart watchers believe this technical event--referred to as a "golden cross"--marks the spot when a bounce within a bear market transitions to a bull market. I being a technical analyst have noted that "all sustained bull markets by definition come with the 50 DMA above the 200 DMA."

Just closely watching if Nifty and Sensex forms Golden Cross ?

Thanking you

Atul Sikrai
Sr Vice President & Head Equities
wiTdom investment advisory.

The Lighter Side of Euro:

Mind you, humor is one thing that always crops up during a crisis, as demonstrated recently in this Blog.

Greece – a country that by its very name would make the Union slip-slide away.
Greece – a country where Euro means toilet, and that’s where it’s going.
What's the capital of Greece? About €3.
Q: Why is the Irish economy in such a crisis?

A: Because they always think their capital should be Dublin.

Ireland’s been downgraded from AAA+ to AA. Before, they were a battery for the remote control, but now they're only good for a Walkman.
It gets worse.
A Greek, an Irishman, and a Portuguese go into a bar. The German pays.
Hmmm ... how many jokes can we take?
And perhaps some of this is no joke.
After all, the Germans saying that they’re going to holiday in the Greek Islands for the next ten years because they’ve prepaid ... may go down well in Germany, but any German trying that in a Greek hotel, may find themselves out on their arsch.

So what is the reality?
In Heaven: the cooks are French, the policemen are English, the mechanics are German, the lovers are Italian and the bankers are Swiss.
In Hell: the cooks are English, the policemen are German, the mechanics are French, the lovers are Swiss and the bankers are Italian.

The European Parliament has decided to change the design of the euro when noticing that the first one was a bit boring and sad. The new design is a stronger and more aggressive one which will make people eager to consume. The European Commission has just announced an agreement whereby English will be the official language of the EU rather than German which was the other possibility. As part of the negotiations, Her Majesty's Government conceded that English spelling had some room for improvement and has accepted a five year phase-in plan that would be known as "Euro-English".

Meanwhile, some believe that Britain will regret not being part of the euro. This is down to the new controlling stranglehold in Europe of the inner sanctum – those in the euro – and the rest – those not. This may create a rift in European Union, but is necessary if the Germans are going to keep paying for holding the Euro zone together. This is why some folks, even those within the Conservative Party, believe the UK must one day join the euro too. Nevertheless,talks of joining the euro are more divisive in Britain than ever, and is still unlikely in my lifetime.
One of the reasons they would never want to join the euro of course, is because they like the Queen and the Pound.

God Bless Euro

Keep Laughing

Always yours

Atul Sikrai
Sr Vice President & Head Equity

Disaster EDU Jour!

Disaster EDU Jour!
EDU: European Disunion.
As told in our last blog that we expected a Santa Claus rally.Markets around the world have risen up as per our expectations.We recommend all our readers to book profit on their long trades and go short on markets again.
Why to book profit on Long and go short again?
Euro is pain point it has tumbled down. Euro to Dollar is trading bellow our comfort zone of 1.30 it’s around 1.27 we expect it to crack down to 1.20.
What we see that environment is uncertain in Euro zone.We expect some kind of systemic failure in coming days.There is lot of uncertainty in financial markets. Look at Italian 10 year bond yield it’s still above 7 %.Lots of pain point still exists in Spain and Greece in coming days.
Spain's jobless rate is currently double the average for the euro zone, rising to nearly 32 per cent in places like Cadiz, a windswept port that has never recovered since its shipbuilding yards went the same way as those on the Clyde. The economy shrank nationwide by nearly four per cent last year, and in the bars of Cadiz's winding, cobbled streets, the sense is that things can only get worse - which, last week, they effectively did.
In France, the messages are also now mixed. Many believe that Mr Sarkozy's alleged pull-out threat was little more than sabre-rattling, pointing out that the French political establishment has long been wedded to the euro. Yet Nicolas Dupont-Aignan, a fomer member of Mr Sarkozy's UMP party who now runs an organisation called "Republic, Stand Up", claims to have got tens of thousands of signatures for his newly-formed petition, titled "Let's Leave the euro Before It's Too Late".
"Great Britain was very fortunate to stay out of the euro," he said. "Why should we have to pay the debts of other countries? The politicians in France created a religion, a dogma around the euro. But France is not Germany, and the French people do not want the German austerity cure, either politically or socially."
Be Smart and book your profit on stocks which has risen more then 25%.
Nifty too has bounced back to 4870 from our recommended level of 4650.

Thanking you
Atul Sikrai
Sr Vice President & Head Equities
wiTdom investment advisory.