What goes around, comes around

Nifty did not fall so much and can be due to excise duty cut etc. But fact remains Nifty did not fall so much given overnight plunge in US markets.

Broad market is selling off, both NH-NL and no of stocks above 50 Day SMA took a plunge. In fact the previous low of -175 in NH-NL was made on 23-Jan when Nifty low was 2661.65, so NH-NL has made a new low in Feb relative to Jan while Nifty has not done so.

The market may be selling off but the DII keep buying some here and some there (see FII/DII Data in the end). Indeed it is difficult to imagine how quickly the markets could fall without their support. On the other hand, the FII selling combined with INR getting cheaper means bad tidings ahead for Indian equity markets. The depreciation of INR is not isolated case among world currencies, see earlier post on US Dollar Index breakout here.

Below is a chart of Nifty historical PE from 1999 onwards till today. 

The PE data is sourced from NSE website.  I assume it is trailing twelve months (TTM) PE.  In any case, we will attempt a broad investing theme here so as long as we follow NSE data the analysis remains valid.

I tried to do analysis of world financial indices based on breakout/ breakdown days. Most world equity indices are showing 10-20 days breakdown as on 18th Feb. This includes Asian markets like HangSeng and Nikkei.

Same is the case for Oil/Gas commmodities, and some agri-commodities also like Corn, Wheat, Soyabean etc. So nothing is getting spared.

On the other hand, US Dollar index, Gold and Silver are showing 20 days upward breakouts.

Overall, this again shows building risk aversion and flight of capital towards safety. It also points to several months of uncertainty and no investor is willing to bet on equity markets.

In same vein as yesterday observations lets see what we got today:

1. The AD ratio and Up/Down percents are still showing pressure on broad market

2. The no of stocks above 50 SMA has been in downtrend last 3 days.

3. The volumes both in NF and cash have declined sharply today. Cash vol actually more than NF vol, haven't seen that in a while.

4. Volumes are lowest since 2nd Jan 09. While then was end of holiday period for many institutions, can't say what is making everyone ditching the markets now! Is it wait-till-elections attitude, is it aversion due to yet unsolved Satyam fiasco, is it expected higher fiscal deficit, or is it just watch which way US markets go ? Most likely the last reason in short term but I also suspect wait-till-election could be reason in the medium term.

5. NF came close but still could touch boundary of gap of 2800 made on 17th Tue. The two day of bounce has been a very weak bounce, it is more of relief that we did not fall down further. However up closing white candles for 2 days still may give minor hope to bulls.

6. FII still selling and DII support is keeping the Nifty afloat with its dignity intact!

The USD Index has given breakout on 17th Feb. See chart below:

Note:The chart in lower pane is weekly chart which shows the longer term trend.

After sharp sell offs from 2950 + levels of last 2 trading sessions, today some relief was seen in Nifty.

From up/down percents, the broader market however seems to be seeing selling. The not so good AD ratio and declining NH-NL inspite of up Nifty close means that broad market is coming under pressure again. That was the same situation till a week back or so when Nifty up closes were not reflected in broad market stocks performance.

FII data is negative again, DII continue to do some buying. If DII also start selling market may see sharp declines.

NOTE: the pivots etc for Nifty Fut may be wrong due to seemingly wrong High value of 2915 in supplied data for NF.

Index investing and allocation of capital based on PE -- these were two ideas I was mulling about for few months now. Today I happened to see a website which is dedicated to research and data on both these. Here is a good food for thought on valuation based index investing:

http://www.passionsaving.com/stock-market-investing-advice.html

Specifically, read up the eighth tenet:

The eighth tenet of Valuation-Informed Indexing is that valuations matter.

It is different from normal investing advice because:

The title of this blog post is inspired by the movie song - "just chill" ...that was being sung in action by FII today going by their sell figures in the end.

The selling today seemingly fed on itself ... just when you think some buying support may emerge, it was more selling till the very end.

The noteworthy point in data today is lower NF and cash volumes. Maybe maybe the post interim budget selling is coming to end ... unless we get fresh overseas selling cues. But correlation to overseas has become somewhat difficult to predict last few weeks.

The AD ratio has worsened and so has NH-NL. Need to watch these further in next few days.

Consumers need to be aware who to complain to regarding issues, and more importantly what is the right procedure of complaint and follow up. Following information is based on my interaction in solving consumer related issues.

Basic things one must do always for consumer related complaints:
1. Maintain relevant documentation.

2. Keep track of complaints to service providers. If complaint is written or email, save the communication somewhere for later use. If you have lodged complain by phone, be sure to take a reference no, and date of complaint and quote that reference no, date to regulatory authorities.