Thread by @sainik636

1.Calm before the storm?:Way ahead for the markets. Excerpts of CH disc yesterday. Eerie calm in the market.All strategists looking for New Highs,based on Govt policies,Corporate Results,Low inflation, Retail/MF fund flows, Sentiment etc. My take:Are we in the "Eye of the Storm"

2. At the peak of every Bull Market except 1992, all the above factors were present. In 1994, Pvt Sector MFs & FIIs having just entered the market, Budget being very good, Record Corp results & sentiment very high, no clouds on the Horizon.

3. 2000 & 2008 too had the same set of positive reinforcements. To some extent even in 2010 & 2015 it was the same scenario. Yet all of them topped out on LIQUIDITY being withdrawn overtly & covertly.

4. In'08, Corp results continued to be good even in Oct '08 ,by which time markets had fallen 65 %

5. BOND Markets : Last few weeks & especially last few days Bond Markets are behaving like a Godzilla after having slept like a Kumbhakarna for nearly 15 years. Bond Markets are the REAL DEAL.

6. Bill Clinton’s political adviser Carville once said: ‘‘I used to think that if there was reincarnation, I wanted to come back as the President or the Pope.
But now I would like to come back as the bond market. You can intimidate everybody.’’

7. While US 2 year yields have doubled in a month, Germany & France's 10 Y yields have quintupled. Euro Swaps, one of the most liquid markets in the world saw 6 Sigma moves in 1yr & 2 yr Swaps.8 years move negated in 48 hours.These kinds of moves will have collateral damage

8. COMMODITIES : They are on a tear with Oil climbing relentlessly to $ 93. Looking at option data & call positions between $ 100 & $ 125 indicate that there is a real possibility of a "Gamma Squeeze".

9.INFLATION : Globally its become sticky with even the CBs acknowledging that it's no longer "Transitory" & have panicked enough to do a QT & increase rates. US core Inflation last seen at these levels in 1992 while in Eurozone it was at this level in 1997.

10. Behaviour of Nifty : Nifty has had 1000 + point moves 6 times & 850 + points moves twice, since Oct 1st. These kinds of moves usually are a characteristic of the ending stages of a Bull Market. Last time they were seen was in Oct- Dec 2007.

11.Behaviour of Stocks:At the end of December lows, many frontline stocks such as HUL, Kotak Bank, ITC were down 20% +, BN,HDFC twins, Reliance, ICICI were down by 18 %. Tata Steel & other metal stocks were deep in Bear Territory. Many popular stocks are 20-40 % off their ATHs.

12. Yet there is complacency all around. Classic case. Infy went on to make new ATHs after results yet within days it dropped like a stone by 15 %, everyone seems complacent. My prognosis : Be watchful of your portfolios.Step aside from fresh Investments for 60 days.

13. We had a wonderful discussion with @anishteli highlighting the past as to how CBs can be put under pressure eg Soros breaking the Pound. He suggested to have a Plan & stick to it. @Prashanth_Krish was more sanguine based on his experience & expected CBs to find their footing.

14. We had very good perspectives from @Prakash__Bajpai, CG, @Phoenix_Traderz , Venkat, Abhay & a host of others some of whose names I might have missed. Thanks everyone.

15. @threadreaderapp Please "Unroll"