Currency USD-INR Analysis

Indian Rupee Longer Term Technicial Analysis:

The currency pair USD-INR is showing sign of bounce back after it has been in consolidation for almost year and half plus during that time we had a nice stock market bounce back after the intial crash in 2008.Ok now lets look at the chart for detail analysis



My moving average cloud statergy suggests that a decisive move above the blue line and closing above will be a bullish for this setup after having triple bottom and it implication will be:

1.Stock markets will take a hit
2.Exports sector will have nice profits
3.more FII will flow into market based on rising interest rates.

Hurdle that it needs to take out the

Resistance 1 : 46:10-46:25
Resistance 2 : 47:50-48


There is strong support around 43-44 area and its been holding for some time.Any break in the area will be flash smash in stock markets (but remember its only true based on moderate inflation numbers.If we enter into hyper inflationary mode then it will avalanche in globex and will eventually bring BSE/NSE with it).

The chart below suggests that breaking below the support draw in green rectangle will takes to previous cup bottom around 38-40 area.

Silver :Physical Vs Paper

The war is on, And the war is between Physical holding of silver vs Paper.Paper enthusiastic has always been the killer of the rising silver prices as most of you know the silver is a metal used both for industrial as well as monetary metal.

Let me give you what paper silver is and its problems !!!

Paper silver is a certificate issued by the bullion banks so that they can hold the physical silver and give you a paper certificate.But what happens if they are not storing the physical in thier vaults that they have promised over years which is nothing a big fraud.This is what SLV (Ishare Silver Trust) GLD (Ishare Gold Trust)

Paper market generally compromises of
Stocks
Options
Futures
Bonds
basically OTC (Over The Counter) derivatives values will be of no value or zero value once the system fails. Video below is what happens when holding paper assets.



Fundamental Numbers:



There is massive withdrawal of physical silver on comex warehouse. Before start of this year comex warehouse had a total of 100 million ounces most of which is registered.But now that no's have changed, And now most of the registered took the silver out of the comex for the eligible.Now we have only 28 million ounce left and if that evaporates at this pace then the comex will default by end of this year.So now what happens to paper silver and its value.That you have decide for yourself but the physical premium will jump 20% overnight.Okay now lets go to technical analysis

Technical Analysis

Silver




Silver daily is showing some weakness here and another sell call has just knock the door for the more downside.Its the paper silver folks so don't worry as they(bullion banks) wanted to shake the loose hands so that they can grab more physical silver out of you by selling paper silver.



Silver was and is on steroids based on the current economic woes. Silver will bottom around $28 based on the current play and will definitely challenge $50 again by end of this year.My long term target that I predict back in mid 2009 was spot on click for links below
http://gamatraders.blogspot.com/2009/09/watch-out-for-goldsilver-breakouts.html
http://gamatraders.blogspot.com/2009/05/gold-silver-dollar-and-treasury-bonds.html
it reached before my 2012 prediction.

Most probable scenario for the silver is that all the points i.e Fibonacci retracement of entire move from 2001 to 2011 which is 50%,the up trend green color of lower end channel shaded in white and down trend in red color all converging at $28 area.So I would call "THE BOTTOM" for silver and most probable price action would be in white color drawn on the above futures chart.

Once the precious metals starts their rallying by early 3rd quater we will see jaw breaking news in media by end of this year for sure.Hold your silver I mean physical holding only which will reap you big way in longer term.Once the selling is done, Are you ready for this crazy lift off ????



Silver cash also shows support around $28 area on multi year moving average cloud strategy on monthly chart.



Right now the inflation talk is paused based on market data and deflation is kickin in but this will not last much longer.US financial pillars are coming apart, And now in a process of defaulting on thier debts.Nothing has been changed or addressed so far on the future of the economy.So the downward spiral continues based on the market action.

Happy Day and Happy Trading.

Market Correction Or Collision Course ?

Stock markets lately is showing severe stress for the upside.Looking at over all globex we are overdue for a steep correction by end this 2 nd quarter.Market movers are waiting for vital numbers by end of this quarter es pl

1.Car sales numbers(Horrible) and also major manufacturing components supply disruption (Japanese quake effect)
2.Home sales (depressing)
3.GDP
4.deficit and debt ceiling numbers (Nice Uptrend)
5.QE2 officially ending (No more funds to funnel markets)

*my comments in () for possible market move.

Markets moved sharpely from the first week of MAY, And bears are now in control of this move.Intially they took down the stronger sector i.e commodities,energy, mining sectors then continued with rest of them.Commodities are the stronger among them, And Silver has shown proxy for entire commodity sector. Once this came apart the rest came too.Now lets cover the charts for Globex Stock Market Indices

United States S&P 500

Most of you have asked me what kinda of strategy do I use ? I use Moving Average Cloud with its variant parameter.(click for larger view and watch for cloud in chart below)

Now lets look more closely what exactly it is :
Prices closing under this band(s)
Red Line(Upper Band) : Warning alert for the traders
Blue Line (Middle Band) : Exiting the position
Black Line (Lower Band) : Conformation of downside

Above the cloud is going LONG and below going SHORT.It all depends upon what time frame your looking ? The chart i have here is monthly time frame for over 6 years.

Now watch closely S&P 500 chart it definitely a Picture worth of 1000 words (you can email me personally for more understanding or comment on this if you want)



India Stock Market NIFTY:

Forming a Head and Shoulder top with multiple left and single right so far.This market is weighting for the RBI interest rate hike along with FII/Local outflow from markets to guarantee fixed income. We are enter ing into higher interest rate regime for sure like early 80's style.Strong support around 12000 to 9000.Inflation is beast here.




Sanghai Stock Index

After having strong decade for manufacturing this market are due for higher to moderate growth.More downside to come.




London Financial Time Index

This market is dead based on pound valuation as more and more problems will come to queen(s)
home as deflation is kicking in those euro zone areas based on debt problems with them.




what fed has been doing all these months is just printing money and funneling them through (BIS) Bank International settlements which is nothing but bank for global banks with currency swaps to inflate the markets around the globe.Fed in past and future are worried about the collapse of markets but not the real economy, As money is not flowing in real system.When the market gets stressed out they go for another round of easing.So possible scenario for next round will be in few trillions as they will panic markets first in expense of collapse of economy.

Welcome to QE3 and this easing will have calculus representation any time market panics i.e

QE(n) where n has value of 1,2,3........Infinity

Will update Metal markets in my next post as most of my blog followers following silver action lately.

Good Luck and Happy Trading.