DOW JONES

Aug 29, 2022

I have put more focus on the current wave on ""DJIA"", wherein I see that wave 1 up is done and we are in wave 2 down. Makes me also believe that when I see the pattern/ structure of NIFTY, both DJIA and NIFTY have more or less IDENTICAL setups. Assuming this to be TRUE, I am personally of the opinion that the Markets are in a Tearing Hurry to achieve Higher Highs hereon. With Fed Chairman Powell having made it clear in no lesser terms, that the FED Does not care about what the markets want to do and that it is ONLY focused in bringing down Inflation No matter what. It is just a question of Time before the Markets realize this and go higher.

Aug 29, 2022

Note

Way Back in 2021, I had read the waves and said that the MARKETS are near their Top, and it did play out. But here is something else I want each one of you to think about. Lets go down to 2020, at the Height of the COVID period. There was a selloff in the markets and everyone emptied their portfolios. What happened thereon??? we rallied. Look at all the instances of FEAR gripping the markets and the SENTIMANT being at all time Lows.... what happened???? Each and every instance the markets rallied further. COVID, UKRAIN INVASION, NOW FED....... 3 instances in less than 6-8 months and what has been the Outcome???? The Markets have Rallied further.
2. Lets look at the Covid period....... Every investor in the market was predicting a deeper Crash. Every Analyist said its the End of the Markets, that job layoff would be high, expenses would double and demand would just not comein. But Guess what...... Results of Corporates went Over the Roof.... yyyyy??????
1. With work from home culture, expenses of companies came SKY DIVING down.
2. Larger Corporates were able to steal maximum share from the unorganised sector in every business because they had BIG BUCKS in their pockets to fight these Bad Times off.
3. Demand NEVER EVER Slowed down !!!!!!
So what happened???????
1. The Balance sheets of FrontLine companies went up like hell. For example, since Covid and considering that each one of you is of the opinion that Business environment is extremely bad, TATASTEEL has paid back $2 BILLION in debt.. Take a guess where all that money came from ???? In INR terms, it is 15 lakh crores. All of it came from Higher Business activity and Profitibility.

Now, let us assume that because of Fed policies and Higher Inflation, there is a RECESSION Coming into the US .....what do you think is going to happen to Corporate balance sheets????
1. There will be LAYOFFS, which will reduce the expense structure in each and every company.
2. Demand will be Low, but so what ???? If demand is Low the corporates have Lowered their expense structures as well. Right ???
3. Will Profitibility fall ????? NO IT WILL NOT. Even if it does, it will be much much lesser than all analyists/ Markets/investors have perceived it to be.
These are some ways of thinking your perception. Market does not care a damn what you think, but you have to care a Big Damn as to what the markets think