End of 1st phase of Bear Cycle
We look to come to an end of the 1st phase of Bear cycle. A correction of 20% starting anytime cannot be ruled out. And for the next 3months, equities will be allowed to take some rest to prepare for the next phase.
In the mean time, where will the capital go?? The answer is commodities. Crude, the premier target. $91 soon. If breaks 92-95 then we are going in for some major downturn. Expect 140 soon. Mostly, looks like upside capped at 91 but IF crosses 95 and rallies then this time, crude may goto 140-155 and we may head lower than March lows(equities).
Stocks that are good: Let the market correct and stocks which are into mining, oil exploration and Importers of goods and services(Dollar index looks to be a great shorting oppurtunity)
All the things have happened in a series, first Large cap gave their bit, then midcaps and then small caps. Seeing that people have been motivated by the exposure in the markets.
This phenomenan is not only common in bear markets but also in bull markets. Its a cycle that goes on in every market of the world.
There is a second thoughts to this study as we have elections round the corner. Exhaustion patterns are visible like the ones when nifty was at 5700. Exhaustion looked but we ran upto 6300 only to correct at higher levels. Or we can go down from here also.
Comments and views welcome
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