>$200 oil: How could have oil experts gotten it so wrong?

Hi Friends,
A nice explanation of greed , fear,optimism and trader psychology,Go through the following Article which explains about the 5 wave structure of OIL with corresponding events unfolding.
Read it and try to recollect what was going through your mind during that phase of oil bull run:).


Three months ago, you couldn't swing a baseball bat in a crowd without hitting someone screaming that the world was running out of oil.

But after reaching a record high of $147 a barrel in July, oil fell as low as $68.57 (on October 16 -- Ed.) – a 50% decline. Before oil slipped below $70, "Goldman Sachs, among those predicting $200 a barrel oil, cut its year-end forecast of oil to $70…" (AP)

How could have "those predicting $200 a barrel oil" gotten it so wrong?

"To be fair, there is always a tendency in parts of the analyst community to look at short-turn trends and assume it’s something that will continue in perpetuity,” commented on the situation an analyst with the International Energy Agency.

Exactly. Isn't projecting short-term trends into infinity the definition of every financial bubble?

Avoiding such predicaments is precisely what Elliott wave analysis helps you accomplish. A study of market psychology, the Wave Principle helps you find psychological extremes in market charts – and then, ideally, forecast a change in trend before it occurs. A priceless advantage, indeed.
Here's how Elliott wave analysis could have helped you navigate around the oil bubble. On June 4, 2008 – still a month before oil's all-time high – Steve Hochberg, editor of Elliott Wave International's Mn-Wd-Fri Short Term Update posted this chart


Later, on August 11, 2008, The Short Term Update wrote:

Oil is down 23% from its July high. [This] chart was published in the June issue of The Elliott Wave Financial Forecast and shows our call for a top. Prices traced out five waves from the December 1998 low and carried to just above the upper line of an unorthodox parallel trend channel. Optimism was at near-record levels and the president of OPEC stated (shortly thereafter) that, “prices won’t come down.” It was a very strong confluence of conditions that indicated a reversal.


Near term, prices have closed lower the past two days, which is interesting in that if there ever was a fundamental “reason” for oil to shoot higher, it is Russia’s invasion of Georgia. I believe that they even shut down a pipeline. When psychology reaches an extreme and the trend turns, all the supposed reasons pundits cited as to why prices were rising matter little. Nearly all were rationalizations to begin with, and the change in psychology exposes their flaws.

And that brings us to today. Here's an update on that oil chart from the June 2008 Elliott Wave Financial Forecast:

Now that oil has dropped 48% from its July peak – into the forecast area of "the previous fourth wave" – we may see market sentiment reach a low extreme. What will that mean for oil going forward?

Regards
Rish

Source :-Elliott wave international

>Displined Trading(Van Tharp)

Discipline Factors

Respond-ability
Beliefs
Low self-esteem.

“I would feel much better about myself, if I were more secure financially."

Feelings getting in the way of trading or investing. Fear and anger are not useful to
trading success.
Conflicts between internal parts of ourselves. For example, conflict might occur
between your excitement part and the part that wants to make money.

Download and read the ebook from this link....Displined Trading(Van Tharp)

Regards
Rish

>SBI analysis

Hi friends,
This is my second post on SBI ,I feel SBI is one of those INDEX stocks
which are following Elliott wave Theory with perfection,Can check my last post on SBI
here.... SBI Autopsy. Getting back on present situation of SBI.

It looks like SBI again making a 5 wave structure from dun 1200 levels
and presently trading is the 5th final of the present local wave.
with a conservative target of 1600-1610,Which also coincides with the previous multiple
tops,There's a good possibility this giving good resistance to further upmove.


Hmm RBI cutting CRR continuously keeping banking sector in limelight
Well if RBI continues to cut CRR like this there's a possibility that this 5th may extend:)
Few levels to watch in extension,1660 and 1720
Let that happen and I would be back again with a update on SBI.

Regards
Rish

>Fibonacci Levels

Explore beyond the basics of Fibonacci.

You know that FibLevels have a powerful effect on the markets, and you probably know the basics of Fibonacci trading, but need to find a better way to use it in the markets. So you can put a bunch of Fibonacci Levels on a chart, what to do about it? How do you use these levels to make good trading decisions?

When a FibLevel breaks, there is money to be made! When a FibLevel holds, there is also money to be made! But how do you know whether a FibLevel has broken? Or will it hold? If you knew that, you would know which way to trade the market! A support level that breaks can provide great profits to the downside. A Support level that holds can give excellent long trades. The same is true for resistance FibLevels. Read more here .....Fibonacci

Regards
Rish

>Dowjones Analysis

Dowjones the impulse started from 7884 is making 5 up from there
with the force full impulsive 3rd already over expect some correction
before Dowjones tests 9900-10000 levels.
Good selling can be seen from 10000 levels.
Plan your trades accordingly.
Good Trading opportunity for those who can track the trend properly
wide swings,Investors should remain cautious:).

Regards
Rish

>China BULL

Other than cash, gold, and a few select natural resource stocks, the only other investments I'd make in these wild and crazy times are in Chinese companies, buying them hand over fist for the long haul.

Yes, that's right. Even bearing in mind the recent milk/melamine scandal, which is outrageous.

You see, China is about the only economy on the planet with both short- and long-term growth potential. Just take a look at the latest economic stats ...

China's August retail sales exploded 23.2% higher to their fastest growth rate in nine years.


Jewelry sales soared a whopping 44.3%, making China the world's second-largest consumer of gold jewelry. Even more impressive when you consider that only one out of every ten Chinese consumers can currently afford gold.

The booming retail sales growth is not confined to just the major east coast cities like Shanghai, either. That 23.2% figure is for ALL of China, proving that the expansion is now blanketing even the rural areas.

Think August might be just a freak month? Well consider the eight month, year-to-date retail sales growth of 21.9% — up from 16.8% for all of 2007. That's almost one-third higher!

No wonder Gome Electrical Appliances Holdings Ltd., China's No. 2 electronics retailer, reported that first-half profits almost tripled.

Have any doubt about domestic consumption supporting China's economy? Well these stats prove otherwise, that domestic demand is soaring.

It would not be good if all that spending occurred by going into debt. But that's not the case in China. Indeed ...

Disposable income in China is soaring.

Urban income jumped 14.4% for the first six months of this year. And even after accounting for inflation, the real net gains in urban incomes gained a huge 6.3%.

But it's not just the urban areas of China that are doing well.

Rural incomes are also soaring — exploding 19.8% higher in the first six months of 2008, from a year earlier. Net of inflation, rural incomes are up 10.3%!

Compare these figures to U.S. net income — adjusted for inflation it's MINUS .9%.

China's seasonally-adjusted Purchasing Managers' Index, jumped to 51.2 in September.

The index — which tracks changes in output, new orders, employment, inventories, and prices — is showing explosive manufacturing growth and indicates China's economy is weathering the global slowdown.

The output side of the index rose to 54.6 in September from 48.7 percent in August, while the index of new orders climbed to 51.3 from 46.

And in case you think China's exports are slowing, the index of export orders increased as well, to 48.8 from 48.4. Total overseas sales of Chinese goods are up 22.4% for the first eight months of the year.

Capital investment also continues to surge in China.

Fixed-asset investment growth rose a whopping 29.2% in July, while urban fixed-asset investment for the first half of the year increased 27%.

Property investment jumped 31%. Investment in farming, fishing and forestry sectors exploded higher by 61.9%. Total fixed asset investment in central provinces surged an amazing 35.3%!

I could keep going, but I think you get the picture. China's economy, despite what the naysayers are telling you, continues to crank ahead, firing away on eight cylinders.

So while the rest of the world is in the midst of a severe credit contraction, China's first-half GDP gained 10.1%, including outstanding rural growth of as much as 13% across six central provinces!

What about China's banks? Are they facing severe losses from what I call the "first world credit crisis?"

Hardly! At most, China's banks have about 3.7% of their total net worth invested outside of China. So even if all of that went up in smoke, it would hardly make a dent in China's banking capital.

Indeed, and ironically ...

Two more things to be on the lookout for with China ...

First, China will continue to buy up oil and lend underlying support to the oil market for years to come. It's the chief reason oil prices have remained above the $90 level, and China will be the chief reason we will eventually see $200-a-barrel oil.

Second, I have strong reason to believe that Beijing is soon going to substantially increase its gold reserves, which at 600 metric tons, are among the lowest in the world as a percent of the country's foreign exchange reserves.

Why? Beijing now has almost $2 TRILLION in reserves in its piggy bank. I have no doubt that central bankers at the People's Bank of China have held high level discussions with Treasury Secretary Henry Paulson.

And Chinese central bankers are prepared to buy oodles of the U.S. Treasury securities that Paulson is going to have to auction off to raise funds for the $700 billion plus U.S. bank bailout.

Put simply, China is going to use a large portion of its $2 trillion in reserves to help bail out the U.S.

>ICICI CLARIFICATION

Dear Customer,

We are aware that you are being misled by numerous malicious and baseless rumors. Many of these are via SMSes. Many of our customers have written in to us expressing solidarity and confidence in our relationship, and have mentioned they have dismissed these rumors, for which we are grateful. Still we know that these rumors may cause you distress and doubts. You are our valued customer and we would not like you to have any of these feelings. So we have now chosen to write to you directly to allay your concerns if any.

You would have seen the categorical endorsement of the soundness of Indian banking as well as ICICI Bank's sound financial health from the RBI and the Finance Minister. You would have also read about the unequivocal certificate of confidence reposed on us by S&P an independent rating agency of repute. We have categorically and in a transparent manner disclosed that

* We have ZERO exposure, directly or indirectly, to US sub-prime
*
We have 150% more capital than what Banks are required to have, and we are one of the highest capitalized banks in the country
* We have a AAA rating
* We have sound liquidity to meet your needs whenever you need and in what ever amounts you may need

Your bank has grown and achieved its status of pre-eminence due to the patronage and trust you have reposed thus far in us. We have made many an Indian smile with a house, car and every banking need dreamed of by Indians. I am sure nothing factually or otherwise has changed in our relationship that we should let baseless rumors cast doubts in your mind. We once again want to reaffirm to you that the bank you have built and assisted to grow to pre-eminence will be with you day and night. We take pride in serving you and being the bank of your first choice.

We desire and request the continuance of your unwavering trust and relationship. We promise to you that not only your deposits but all your interests are safe and secure with us. In case you need to reach us, kindly write to us at customer.care@icicibank.com.

Sincerely

V. Vaidyanathan
Executive Director
ICICI Bank Ltd

source:- ICICI customer care

>India readies big bailout measures

NEW DELHI: With liquidity becoming the immediate priority of the government, it is looking at a slew of measures to make more funds available to t
he credit market and there are strong indications that banks may be nudged to lend to companies with a good credit rating.

Official sources told TOI that a further cut in the cash reserve ratio (CRR), a reduction in interest rates and a 'ban' on reverse repo are some of the options being looked at to augment liquidity, while a ban on short selling is also being considered as a way of curbing the markets' bearish sentiments.

A proposal to dilute mark-to-market norms for banks is also being considered. Such a step, which has already been taken in the US, essentially allows banks to pretend that their assets have the same value at which they were bought rather than the current market value. Thus, they are able to avoid providing for any losses that would accrue if they valued them at current levels.

In addition to these measures, banks might be informally told that they should lend to companies with AAA ratings. This, because it would serve little purpose to restore liquidity to banks if they continued to remain wary of lending.

In the aftermath of the global financial meltdown, banks and financial institutions have turned ultra-conservative in lending. "What purpose would it serve if the banks remain tight-fisted," said a bank functionary monitoring the tight credit situation.

The cut in CRR would effectively mean that banks need to maintain a smaller proportion of their reserves with the RBI, thus releasing more funds to lend. Similarly, the central bank foregoing the option of reverse repo would mean that it would not soak up money from the banks, thereby leaving them more funds to loan.

While the two measures are aimed at boosting liquidity, the proposal to cut interest rates is aimed at making credit available to companies at reasonable rates. As inflation rose, the RBI had successively hiked interest rates and though price rise remains an important concern for a government faced with looming elections, the government now strongly favours restoring liquidity.

Some companies have been apprehensive about CRR cuts easing the liquidity situation but inadequate to fund expansion plans. They argued that this would curb the momentum of growth.

While liquidity remains the prime concern, the government clearly feels the need to address market volatility as well. Hence the idea of banning short selling. Short selling means an investors sells of shares he does not possess. It has already been banned in the US, Italy and China in an attempt to check market downslide.

Experts are divided on whether it is an effective measure. Those against it point out that the month-long ban in the US, which has just ended, failed to achieve anything. In fact, they argue, the stocks protected by the ban only become more volatile and some of their prices dropped more sharply than others.

>Will the G-7 Save the World?

Here is what the G-7 will try to do this weekend:

* Take decisive action and use all available tools to prevent "important" institutions from failing.

* Take steps to unfreeze credit and money markets and ensure that banks and other institutions have broad access to liquidity and funding.

* Ensure that banks and other major financial intermediaries can raise enough capital from public and private sources to re-establish confidence and kick start lending to individuals and businesses.

* Ensure that each country's deposit insurance programs are strong and consistent to assure depositors their money is safe.

* Take action to restart the secondary markets for mortgages and other securitized assets.

If they can do the above things, the crisis should start to end. How quickly it will end and what will be the lingering effects are any one's guess.

Regards
Rish

>American Bankers wealth erosion

>Surviving BEAR!!!

A bear market refers to a decline in stock prices of at least 15-20%, coupled with pessimistic sentiment underlying the market. Clearly no stock investor looks forward to these periods. Don't despair, there is hope! In this article we will walk you through some of the most important investment strategies and mindsets that one can use to limit losses - or even make gains - while the stock market is performing in such a manner.

Be Realistic!
First off, having a realistic mindset is one the most important things to do during an economic slowdown. Remember that it's normal for the stock market to have negative years - it's all part of the business cycle.

After a raging bull market, it's easy to forget the bad times. To expect the market to grow at a 20%+ rate forever goes against everything we can learn from history. Occasional slowdowns are inevitable.

Where to Invest in Bear Country
There are a number of things you can do to protect yourself from bears - and maybe even eke out some gains. Let's take a look:

1. Play Dead - Stay on the Sidelines
During a bear market, the bears rule and bulls don't stand a chance. There's an old saying that the best thing to do during a bear market is to play dead - it's the same protocol as if you meet a real grizzly in the woods. Fighting back would be very dangerous. By staying calm and not making any sudden moves, you'll save yourself from becoming a bear's lunch.

Playing dead in financial terms means putting a larger portion of your portfolio on the sidelines in the form of money market securities. In a bull market, it is detrimental to have uninvested cash around because it isn't working to get the best potential return. This isn't true in a bear market because cash will hold its value (and earn at least some interest) when stocks head south. When the right buying opportunity comes along, you'll have the flexibility to go for it. Of course, this means you have to be timing the market to some extent, a task that is tough, if not impossible, to do precisely. However, the point is that during a bear market, even if you take some cash out of the market later rather than sooner, this may still prove to be a good decision if the bears rule for a sustained period.

2. Value Stocks
Bear markets can provide great opportunities for investors. The trick is to know what you are looking for. Beaten up, battered, underpriced: these are all descriptions of stocks during a bear market. Value investors often view a bear market as a buying opportunity because the valuations of good companies get hammered down along with the poor companies and sit at very attractive valuations. However, value investing is an art; not every stock in a bear market is a bargain, but this is a time when some real bargains can definitely arise. Take Warren Buffett, for example. He often builds up his position in some of his favorite stocks during less than cheery times in the market because he knows that the market's manic-depressive nature can punish even good companies more than warranted.



3. Short Selling
Another approach to a bear market is to adopt a more aggressive strategy. A short position allows an investor to profit as the stock heads downward. Keep in mind that the ability to profit on the other side of a stock is accompanied by substantial risks.
4. Bonds and Asset Allocation
Asset allocation proves itself during times of stock market underperformance. During economic boom times, investors are kicking themselves for not being all in equities. The exact opposite is true during times of economic hardship and stock market downturns. Having a percentage of your portfolio spread among stocks, bonds, cash and alternative assets is the core of diversification. How you slice up your portfolio depends on your risk tolerance, time horizon, goals, etc. Every investor's situation is different.

5. Defensive Industries
There are equity securities that generally perform better than the overall market during bad times. These industries have become known as defensive industries, or non-cyclical industries, because they refer to the defense they provide your portfolio in times when the stock market plummets. Here we are talking about the companies that reside within the industries that provide goods and services that consumers, governments and the economy as a whole will need come rain or shine.

A simple example would be household non-durables (things that get used up quickly) like toothpaste, shampoo, shaving cream, etc. Regardless of whether the economy is booming, people will still need to brush their teeth, wash their hair and shave. Despite this, there is still an element of stock selection within historically defensive industries.


Conclusion
As all these tips suggest, caution is the name of the game. By having your money on the sidelines or invested in bond funds, value stocks, defensive industries and, under certain circumstances, on the short side of a stock you'll be well-positioned to endure a bear market much more gracefully.Staying realistic and avoiding panic will also help you keep your assets out of harm's way.

>Advance Tax

>RANBAXY

Ranbaxy looks to have made a nice bottom near 240 and has bounced
multiple times from there,A nice corrective rally is not ruled out
in Ranbaxy if it continues to hold 240 in coming days
Upside targets can be 280,300 respectively.

Regards
Rish

>Trading elliott waves

Hello friends,
Here in this post I have tried my best resources to simplify
the notorious ELLIOTT WAVE,Which many traders don't even try to learn for one basic reason ,They say its "Complex".Hope this read will help them to grasp the basic trading strategies used with each wave.
WAVE STRUCTURE



TRADING WAVE 1

TRADING WAVE 2

TRADING WAVE 3

TRADING WAVE 4

TRADING WAVE 5


TRADING WAVE A

TRADING WAVE B

TRADING WAVE C

Hope you all find this use full.
Regards
Rish

>Dowjones relief rally should come soon

It seems that most of the ingredients are here for a good relief rally. Fear is through the roof. The fear based indicators such as VIX are spiking higher. The impending doom of USA financial markets is being broadcast on every channel, and every Analyst on the street is debating how we got here and who is responsible. And has anyone noticed that the financials as a whole are not making lower lows inspite of the fact that the news couldn't be any worse.

If you see the above 5 yearly chart of dowjones its trading on that cluster support band which was formed in 2004-2005.
Ideally, It may have another plunge followed by a swift rally reversal to trap the bears, but there are no guarantees that the market doesn't crash either. Maybe we are on the brink of financial armageddon. The truth is we won't know until it's in the rear view mirror, so the best we can do is wait patiently to pounce on the rebound.

Regards
Rish

>Technical analysis & strategies

Overview

1. Why Analyze Securites?
   
2. A Random Walk
3. Technical Analysis 1
4. Technical Analysis 2
5. Fundamental Analysis 1
6. Fundamental Analysis 2
   

Chart Analysis

1. What are Charts?
2. Trendlines
3. Support and Resistance
4. Introduction to Chart Patterns
5. Candlesticks 1
6. Candlesticks 2
7. Candlesticks 3
8. Candlesticks 4
9. Candlesticks and Support
10. Candlesticks and Resistance
11. Candlestick Bullish Reversals 1
12. Candlestick Bullish Reversals 2
13. Candlestick Bearish Reversals 1
14. Candlestick Bearish Reversals 2

Reversal patterns:

1. Bump and Run Reversal BARR
2. Double Top
3. Double Bottom
4. Head and Shoulders Top
5. Head and Shoulders Bottom
6. Falling Wedge
7. Rising Wedge
8. Rounding Bottom
9. Triple Top
10. Triple Bottom

Continuation patterns:

1. Cup with Handle
2. Flag, Pennant
3. Symmetric Triangle
4. Ascending Triangle
5. Descending Triangle
6. Price Channel
7. Rectangle
8. Measured (Bull) Move
9. Measured (Bear) Move

Indicator Analysis

1. Indicators 1
2. Indicators 2
   
3. Indicators 3
   
4. Indicators 4
   
5. Accumulation/Distribution Line
   
6. Average Directional (ADX)
   
7. Average True Range (ATR)
   
8. Bollinger Bands
   
9. Commodity Channel Index (CCI)
   
10. Chaikin Money Flow 1
    
11. Chaikin Money Flow 2
    
12. Chaikin Oscillator
    
13. Moving Averages 1
    
14. Moving Averages 2
    
15. MACD 1
    
16. MACD 2
    
17. MACD 3
    
18. MACD 4
    
19. Percentage Volume Oscillator (PVO)
    
20. Price Oscillator (including PPO)
    
21. Price Relative
    
22. Rabbitt Q-StockRank
23. Relative Strength Index (RSI)
    
24. Standard Deviation
    
25. Stochastic Oscillator
    
26. StochRSI
    
27. TRIN
    
28. VIX
    
29. Williams %R
    
30. ZigZag
    

Market Analysis

1. The Dow Theory 1
   
2. The Dow Theory 2
   
3. The Dow Theory 3
   
4. Elliot Wave Theory
   

Trading Strategies

1. John Murphy's Ten Laws
   
2. Arthur Hill on Goals, Style and Strategy
   
3. Arthur Hill on Moving Average Crossovers
   
4. Scott McCormick's Gap Trading Strategies 1
   
5. Scott McCormick's Gap Trading Strategies 2
   
6. The Pre-Holiday Effect
   
7. The "Last" Stochastic Technique
   
8. Richard Rhodes' Trading Rules

other reading material

1. WhatIsTechnicalAnalysis.pdf (4.40 mb)
2. TechnicalAnalysisAtoZ.pdf (8.47 mb)
3. ClearStationEducation.pdf (1.23 mb)
4. TradersWheel.pdf (1.97 mb)
5. WizardsDen.pdf (1.90 mb)
6. Tradecraft.pdf (3.25 mb)
7. Briefing.pdf (3.50 mb)
8. OnlyYesterday.pdf
9. ArtOfDaytrading.pdf
10. PhantomOfThePits.pdf
11. StockMarketManias.pdf (2.12 mb)
12. LookingBackCrashOf1929.pdf
13. ZeroSumGame.pdf
14. HedgeFundsLeverageLTCM.pdf
15. Supermontage.pdf
16. DirectAccessOrderRouting.pdf
17. TradersGlossary.pdf
18. TurtleTrader.pdf (13.50 mb)
19. WorkstationGuide.pdf
20. MultipleDisplaySetup.pdf
21. NasdaqTraderManual.pdf (2.47 mb)
22. CharacteristicsRisksOptions.pdf
23. ForeignExchangeMarket.pdf (1.32 mb)

>Baltic Index the nemesis of Shipping companies

Shipping companies are in troubled waters with London’s Baltic Dry Index falling sharply in the last three months. The index, which measures freight rates for bulk commodities — mostly iron ore, coal, and grains — has fallen by a whopping 67% to 2,990 points till October 2 from its average peak of 8.936 points in July.

The index, widely regarded as a barometer of the world economy, has fallen further since then, igniting fears that China’s demand for commodities may be cooling.

The Street is worried. The shares of most shipping firms have plummeted 15 to 37 per cent, sharper than the 13 per cent fall in the Sensex in the same period. Varun Shipping has fallen 15.23 per cent, while GE Shipping has slumped 19.69 per cent and Shipping Corporation of India (SCI) 29.59 per cent. Essar Shipping has been the biggest loser, falling 37.46 per cent.

A senior shipping analyst with a leading brokerage house said China was sitting on a huge inventory of iron ore and was waiting for Brazil to complete the renegotiation of iron ore prices with the leading steel makers in Asia. “We expect a strong buying demand from China, which will again push the Baltic Dry Index northwards in the short term,” he said.

One reason cited for this standoff between Brazil and Asian steel makers is the higher iron ore prices being charged by Australia than Brazil. Since the freight rate is lower between Australia and China than that between Brazil and China, Australia is charging a higher price for its iron ore. This has prompted Brazil to renegotiate iron ore prices with leading steel makers in Asia, says a senior executive of a domestic shipping company.

So if you like shipping sector do see Baltic index before you jump in to buy these companies:)

Regards
Rish

>Bailout or Bold out

Nice insightful article

If you think the biggest cost of the $700-billion bailout package is going to be higher taxes down the road, you're wrong.

The biggest cost is going to be the sheer destruction of the purchasing power of your money, an outright devaluation of the dollar that's going to occur, no matter what.

Don't get me wrong. I am not against the bailout package. It had to be done. We can debate free market philosophy for the next 100 years. We can debate the details of the package, too. But in the end none of that matters.

Because if Washington didn't act on this crisis, if they let AIG, WaMu, and others fail, the alternative — a deflationary depression several times worse than the Great Depression — would be a lot more painful, destroy a lot more lives and families, and take many more years to recover from.


So for now let's put all the philosophical debate aside and discuss this crisis in practical terms.

Where's the money going to come from?

Washington doesn't have $700 billion. Nor did it have the $592 billion it's already shelled out since August of last year, when the crisis began.

In fact, the U.S. government was broke before this bailout package. Now, it's even more broke.

So the money has to be borrowed from the public. Yet again. From investors in this country and from other countries. By issuing loads more government notes and bonds. Loads more IOUs.


Right now, it seems like investors around the world still have enough faith in the U.S. government to lend it most of the $700 billion. But it remains to be seen what interest rates they'll want to receive.

So we should be able to borrow most of the money for the bailout package.

And what about the amount that the public isn't willing to lend to the Treasury? No problem there either. The Federal Reserve will just print up the balance.

You see, the ultimate source of all money in the U.S. is either debt, or monopoly money created by the Federal Reserve. Or some combination of the two.

Either way, it's not real money. It's fictitious money. It's nothing but a bunch of IOUs and electronic credits and debits.

It's nothing more than a promise to pay you something of value. If you wait around long enough to get paid.

So we have that settled. We'll be able to borrow the money, or print it up. Either way, it's clear: The U.S. government, already in hock past its eyeballs, has to go even deeper in debt. A lot deeper.

So the next question is ...

What's the $700 billion really going to cost us?

No one knows for sure. But I'm going to take some guesses here.

First, if you buy the line that the Treasury is aiming to make money on the bailout, on behalf of the taxpayers — you and me — think again.

Since real estate prices were the trigger behind the losses, it's safe to assume that if the Treasury is going to make us any money on this deal then the assets underlying all the losses to begin with will need to somehow rise in value for us to make a profit.

That means property prices are going to have to regain all they've lost, and then some, for there to be a profit on that $700-billion investment.

I repeat: Property prices are going to have to regain all the value they've lost, and then some, for the Treasury to show us a profit on this $700-billion investment.

That's simply not going to happen. Not in my lifetime. Property prices might bottom out and start moving back up. But property values are not going to exceed their previous peak in my lifetime or likely yours.

Oh, and keep in mind, it's not really $700 billion. You have to add in the $592 billion the Fed and the Treasury already pumped into the economy prior to this bailout package. So the total so far is $1.29 trillion.

Second, there's the interest expense on all the IOUs that will have to be issued.

Let's take the total so far, the $1.29 trillion. Apply a conservative 5% interest rate the government is going to have to pay to borrow the money.

That's another $64 billion per year in interest expense costs. Compounded over 5 years, that's over $350 billion. 10 years, $807 billion.

Where's that money going to come from?

And if we're to profit from the bailout, that just means real estate prices not only have to get back to their previous peak, they have to exceed that peak by the amount of the interest expense that has to be paid to show a profit.

More proof we're not going to profit.

Third, raising taxes isn't going to help, either. There's no way the economy can handle higher tax burdens right now. And even if it could ...

Recouping part of the $1.29 trillion (ignoring the interest expense cost) through taxes is not a profit for the taxpayer. It's a burden. A cost.

So I ask you again, where's the profit potential for the U.S. taxpayer?

Answer: There will not be any profits. Period.

So the real cost of this bailout will be at least $1.29 trillion. And if real estate prices don't stabilize soon, the cost could easily mushroom to $1.5 trillion. Or $2 trillion. Perhaps even more. Not counting the interest expense!

And again, how's it going to be paid for?
Money Cut

The one and only answer: By a substantial devaluation of the U.S. dollar. By inflating it away. By eventually raising asset prices fictitiously through inflation, through more smoke and mirrors, via an eventual massive dollar devaluation.

In fact, there's precedent for it: The Great Depression only ended after Roosevelt devalued the U.S. dollar in January 1934 by raising its exchange rate with gold from $20.67 to $35.00. That was a de facto 69% devaluation of the dollar.

The same thing is going to have to happen this time around. Only you won't see any President, or anyone in Congress or the Fed actually coming out and saying the dollar needs to be devalued.

They won't have to. The markets will do it themselves. Notwithstanding an occasional knee-jerk rally in the buck, the dollar is toast. No ifs, ands, or buts about it.

Already, some measures of money supply, the ultimate source of devaluation of a currency and inflation in the economy, show money growth running at an annual rate of more than 14%.

And in the last two weeks, that rate has exploded even higher, to an annualized growth rate of, get this — over 200%!

There is no way that kind of monetary growth can be anything but inflationary.


This investment news is brought to you by Money and Markets. Money and Markets is a free daily investment newsletter from Martin D. Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Dr. Weiss is a leader in the fields of investing, interest rates, financial safety and economic forecasting. To view archives or subscribe, visit http://www.moneyandmarkets.com.

>Technical Patterns Examples

Hello Friends,
We all know this financial market is like a big wild jungle which contains different kind of animals,Big,small,Tall,fat etc and all animals survive by hunting many tend to hunt each other,End result "Survival of the fittest".

Exactly same way stock market is glutted with players who try different things but with same goal "Making money".This money craving makes Traders, Try different methods few of them are listed
below.
1- Technical analysis
2- Astrology
3- Numerology
4-Tape reading
5-Gut feeling
6-Flukes (Tukka)
7-News Related

Out of these the few which i like are Technical analysis+Gut feeling+news.
I have come across few people who just don't believe in technicals at all,They turn apathetic towards technicals:)

A small initiative from me to create awareness among traders to learn
Technical analysis so that traders can find bit easy to perambulate through this
wild financial jungle.There is untrammeled scope of improvement in ones trading activity,If Technical analysis is used to make decision on trade setup.:)ofcource
Technical analysis is a vast subject and need to update regularly.


Below am posting few recent charts which fetched great rewards if technicals were
applied on them.

PS:-These examples are of classic technical analysis(entry level) still see their power.
ILLUSTRATION OF HEAD&SHOULDER and RISING WEDGE















































































If you find this post use full do comment, In near future would try posting about advanced Tech strategies and tool with their chart examples.
Elliot wave etc.

Regards
Rish

>Naked American Financial System

Amazing write up must read:)





The United States is supposed
to have not just great markets
and great enterprises, but also
great regulators. The Federal
Reserve and the Securities and Exchange
Commission are respected
and feared the world over. Those great
markets also rely on institutional
mechanisms, like the rating agencies
— all of which are now Americanowned.
The amazing thing about this
entire pack is that the financial crisis
has shown all of them to be as naked
as the emperor who strutted out in
what he thought were his new clothes.
What, for instance, was the SEC
doing when the great investment
banks (Bear Stearns, Lehman Brothers,
et al) were leveraging their equity
30 and even 40 times? If a company
runs $600 billion worth of assets
on an equity base of just $26 billion,
then if those assets drop in value
by just 5 per cent, the company
goes bankrupt — which is what has
happened. If the SEC wasn’t looking
at the problem, what were the rating
agencies doing when they gave these
firms the best ratings in the book?
If the risks are blindingly obvious today,
why could the Fed not see them
and ask for corrective action from the
lawmakers or by the SEC?
It seems obvious now that the
whole investment banking model is
simply not viable. They made fat
profits because they ran risky, overleveraged
businesses; and they were
not regulated in the way that traditional
banks are, so they did not
have any defences in place for when
things go wrong. That explains why
it is banks like Bank of America
which are now gobbling up the investment
banks, and why Morgan
Stanley is running for cover to Wachovia
and others.
When Enron went bust, it was run
by a bunch of Harvard MBAs, advised
by McKinsey, and its accounts audited
by one of the big accounting
firms (which imploded). It turned out that the
accounting firms were busy
getting money from their clients
for doing consulting work — which
created a conflict of interest when
it came to proper auditing. That same
problem now affects the rating agencies,
which were getting a lot of work
and therefore revenue from the investment
banks. So did they go soft
in their ratings of the investment banks
— and mislead the markets? In any
case, did the people in the rating agencies
actually read and digest the thousands
of pages of legalese associated
with every complex financial instrument
before they gave a rating,
for which the fee was relatively modest?
You can guess.
In other words, it is not just the
investment banking model that is
broken, it is the entire system of complex
financial instruments that no
one fully understood, so that risk
was not properly measured — and
that is lethal when things start unraveling.
The trading practice that
makes things unravel even faster in
such a situation is called ‘going short’
— a practice long frowned on by Indian
regulators for being destructive
of value, but advocated by market
fundamentalists as being an
inalienable part of an efficient market.
Now, surprise, the SEC is talking
of banning ‘shorting’ because
that is causing the selling stampede
behind the bankruptcies!
Someone said the other day that
the worst is over. Don’t bet on it.
All the assets owned by the firms that
have gone bust (trillions of dollars
worth) have to be sold, and it will
be a fire sale at knocked down prices.
That means enormous destruction of
asset value, and someone has to feel
the pain. AIG, for instance, has been
given two years to sell down, so it
is going to last a while.
Closing thought: It isn’t funny any
more to say that the Indian financial
regulatory system shines because
of its innate caution.
T N Ninan

World financial crisis and its impact-A.K.Prabhakar

Are bad times here to stay in 2008?

3more months to end the year and Global financial crisis seeing no end we have September 30, Tuesday, which is the deadline for hedge fund investors to put in requests to get their money back by year’s end 90day notice period. The redemption requests have been pouring into hedge funds well ahead of the Sept. 30 deadline. More pressure can be seen in the last few days, hedge funds, control nearly $2 trillion in assets and indication are that 10% of withdrawal can be seen.

Read more here.... Look Out for Bloody Tuesday

Will the $700billion package save the crisis?

This can be a temporary relief and never a permanent solution many times I get a feeling if U.S has turned into socialist and using good money to buy bad asset to save mismanaged corporate, instead of allowing them to die natural death. I have attached a file which says 1,479 FDIC member banks are at risk of failure with total assets of $2.4 trillion. So we are no way near to solution. , the sixth-largest U.S. bank by assets, hunts for a merger partner – reports. The bank suffered a record $9.11 billion loss in the second quarter.Read more here...Final bailout

Will India face the same problem?

India has a better system of banking and with majority of banks being PSU where Govt hold more than 50% stake we don’t have a problem. India is a better regulated market in terms of Banking and NBFC as RBI norms are strict and regular monitoring and stricter NPA norms are followed, recently also RBI warned KOTAKBANK to reduce equity market exposure as it exceeded the limits prescribed.

Special mention:

Ex-RBI Governor Y.V.Reddy was very smart enough to check asset bubble by hiking interest rate and reducing liquidity into the system and it did effect growth but he was strong to say I would compromise growth to control inflation. And warned Govt that real crude prices were not reflected in inflation so first correct that in response to FM statement to cut interest rate. When Fed was cutting rates he stood his way with higher rate and tighter liquidity.

Recap: Market summary for April 7th 2008-A.K.Prabhakar (for use of ANANDRATHI)

Market always discounts bad & good news at faster pace maybe a layman can be laggard, Inflation worry was there for almost 1years and RBI governor refused to bow down to political pressure to cut interest rate when FM wanted to reduce interest rate to improve growth, the same man (FM) now says we compromise growth for inflation. And the mess which has been created by political bosses for there whims and fancy has impacted us now. Good thing about political stupidity is they can’t face midterm election now and hard fight over inflation will happen. The art of living lies not in eliminating but in growing with troubles, growth doesn’t come without inflation but we need some visionary moves to control inflation and stimulate growth at the same time. If someone were to watch the moves of China they are accumulating oil wealth for long time and the reforms are faster and timely compared with any countries in the world. As Sitaram Yechury pointed out after visiting china, China is putting there hand on left and turning (doing everything) Right’.

Remember: The bigger the boom generated by manipulation of money and credit, the bigger the ultimate bust.

Read more here....Economy in Trouble, No Matter Bailout Outcome

Opinion: Bad times never last, but time is the best cure for any problem maybe by February or March 2009 market can show a bottom and enter a consolidated phase before an up move and I doubt a new high for next 3years but come 2009 good time for stock market starts and wise investment would give best returns.

A.K.Prabhakar

Lehman Brothers Holdings Inc

The 158-year-old firm was founded by brothers Henry, Emanuel and Mayer Lehman, Jewish immigrants to the US from Germany, in 1850. Henry set up a general store in Alabama in 1844 and was later joined by his brothers. In 1850 they set up the merchant bank in New York after having made money in railway bonds. Lehman Bros, which till June 2008 had not reported a quarterly loss even once, had earlier survived many an economic crises, like railroad bankruptcies of the 1900s, the Great Depression in the 1930s, and the collapse of Long-Term Capital Management in the 1990s.

Regards,

A.K. Prabhakar

>Did that 7.3% two-day jump impress you(DOWJONES)

A nice commentary about the 2 days humongous rise in dowjones .

Did you breathe a sigh of relief when the Dow Jones jumped by 779 points last Thursday and Friday? Did that 7.3% two-day jump impress you?

I Wasn't. Let Me Give You Three Reasons Why.

First of all, I don't trust any rally that is based upon a government rescue. The price tag for bailing out Fannie Mae, Freddie Mac, and AIG is already in the $700 billion range and almost certain to rise if Washington Mutual and Morgan Stanley (and others yet to be revealed) join the list.

By the time the rest of the anything-for-a-commission crowd comes clean with their financial sins, I would be surprised if the government's bailout tab DOESN'T EXCEED 1 TRILLION DOLLARS!

We're not talking about play money either.

We're talking about real dollars that you, I, and our children will be paying for decades. Instead of celebrating, I believe that the bailouts are a reason to be even more worried about the state of our economy and the U.S. stock market.

Second, I believe that the end-of-week rally you saw last week was not because of the government bailouts but because of the temporary ban on short selling. Last week, the SEC banned short selling on 799 financial companies. And they just happened to announce this dramatic change right before a 'triple witching' Friday.

Triple witching is when stock index futures, stock index options and individual stock options all expire on the same day. A triple witching day only happens four times a year. It is also called "freaky Friday" because of the exaggerated moves it often creates.

Last Friday would have been volatile enough because of triple witching. But the SEC only threw fuel on the fire by banning short selling. Once the ban on short selling expires on October 2, the selling pressure could return in droves.

Third and most important, if you're going to remain invested in the stock market, you're making a huge mistake by ignoring the Super Ball bounce going on over in Asia.

I don't see the Chinese, Japanese, Indian, Taiwanese, South Korean, or Singaporean governments spending billions of taxpayer dollars to bail out a bunch of greedy and irresponsible corporations.

I don't see any of the Asian economies in danger of rolling into a recession either.

Money and Markets issues can be republished. Republished issues MUST include attribution of the author(s) and the following short paragraph:

This investment news is brought to you by Money and Markets. Money and Markets is a free daily investment newsletter from Martin D. Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Dr. Weiss is a leader in the fields of investing, interest rates, financial safety and economic forecasting. To view archives or subscribe, visit http://www.moneyandmarkets.com.

>CNXIT H&S?

IT stocks if you think they have hit the bottom

Read this with a pinch of salt
Daily chart shows a big Head & Shoulder so before you think of buying then wait for
more dips ,Also a big trigger for IT sector would be INFOSYS results.
If we go by HS target would be a fall of about 500 points more in the IT index.
Recent financial turmoil in USA too had hit IT badly as they lost many big clients.
This is my personal view you may or may not follow this :)

Of course some rise may come before fall.

Regards
Rish

DOWJONES CHANNEL

Dowjones can show some good upmove once it cuts that channel up
elese it will continue to drift down in lack of ant trigger.
Regards
Rish

LIVE NEWS

>Shorting ban???? not likely

Friends ,
We saw orchestral rises in stock markets world over in last few days.

Let me give my 2 gray bytes to this SHORTING saga.World over we saw massive onslaught by bears since a month or so with in between deep cuts ,We saw all major world indexes making new 2008 lows kind of cascading effect of American financial turmoil.
Did we see its effect on INDIA?

In my words to a lesser extent as compared to world markets.There every financial index was making newer lows every other day(They deserved it their banks were on weak foundation) ,But here back home in INDIA Banks were the one which were holding on and are near to there 2008 highs(Tried alot to figure out why they held strong one valid reason i think is they selling dollar what they bought near 39and presently near 46+).

So under such scenario asking for shorting ban is INDIA looks bit a wishful thinking. Overall with out BEARS Markets wont be good for trading :)Also the kind of fall BRICS countries faced recently INDIA is the only one which is least affected .Why UK ,Russia banned naked shorting there because it was going out of control.Also if any of you read an .pdf File from HSBC they tittled that article as
"INDIANS ARE THE LONE BULLS IN WORLD"
so asking about ban on shorting is not justified.

Regards
Rish

Do give your comments.

>Is India poor, who says? Ask Swiss banks

DISHONEST INDUSTRIALISTS, scandalous politicians and corrupt IAS, IRS, IPS officers have deposited in foreign banks in their illegal personal accounts a sum of about $ 1500 billion, which have been misappropriated by them. This amount is about 13 times larger than the country’s foreign debt. With this amount 45 crore poor people can get Rs 1,00,000 each. This huge amount has been appropriated from the people of India by exploiting and betraying them.

Once this huge amount of black money and property comes back to India, the entire foreign debt can be repaid in 24 hours. After paying the entire foreign debt, we will have surplus amount, almost 12 times larger than the foreign debt. If this surplus amount is invested in earning interest, the amount of interest will be more than the annual budget of the Central government. So even if all the taxes are abolished, then also the Central government will be able to maintain the country very comfortably.

Some 80,000 people travel to Switzerland every year, of whom 25,000 travel very frequently. “Obviously, these people won’t be tourists. They must be travelling there for some other reason,” believes an official involved in tracking illegal money. And, clearly, he isn’t referring to the commerce ministry bureaucrats who’ve been flitting in and out of Geneva ever since the World Trade Organisation (WTO) negotiations went into a tailspin!

Just read the following details and note how these dishonest industrialists, scandalous politicians, corrupt officers, cricketers, film actors, illegal sex trade and protected wildlife operators, to name just a few, sucked this country’s wealth and prosperity. This may be the picture of deposits in Swiss banks only. What about other international banks?

Black money in Swiss banks -- Swiss Banking Association report, 2006 details bank deposits in the territory of Switzerland by nationals of following countries:

Top five
India---- $1456 billion
Russia---$ 470 billion
UK-------$390 billion
Ukraine- $100 billion
China-----$ 96 billion

Now do the maths - India with $1456 billion or $1.4 trillion has more money in Swiss banks than rest of the world combined. Public loot since 1947: Can we bring back our money? It is one of the biggest loots witnessed by mankind -- the loot of the Aam Aadmi (common man) since 1947, by his brethren occupying public office. It has been orchestrated by politicians, bureaucrats and some businessmen. The list is almost all-encompassing. No wonder, everyone in India loots with impunity and without any fear.

What is even more depressing in that this ill-gotten wealth of ours has been stashed away abroad into secret bank accounts located in some of the world’s best known tax havens. And to that extent the Indian economy has been stripped of its wealth. Ordinary Indians may not be exactly aware of how such secret accounts operate and what are the rules and regulations that go on to govern such tax havens. However, one may well be aware of ’Swiss bank accounts,’ the shorthand for murky dealings, secrecy and of course pilferage from developing countries into rich developed ones.

In fact, some finance experts and economists believe tax havens to be a conspiracy of the western world against the poor countries. By allowing the proliferation of tax havens in the twentieth century, the western world explicitly encourages the movement of scarce capital from the developing countries to the rich.

In March 2005, the Tax Justice Network (TJN) published a research finding demonstrating that $11.5 trillion of personal wealth was held offshore by rich individuals across the globe. The findings estimated that a large proportion of this wealth was managed from some 70 tax havens.

Further, augmenting these studies of TJN, Raymond Baker -- in his widely celebrated book titled ’Capitalism’s Achilles Heel: Dirty Money and How to Renew the Free Market System’ -- estimates that at least $5 trillion have been shifted out of poorer countries to the West since the mid-1970.
It is further estimated by experts that one per cent of the world’s population holds more than 57 per cent of total global wealth, routing it invariably through these tax havens. How much of this is from India is anybody’s guess.

What is to be noted here is that most of the wealth of Indians parked in these tax havens is illegitimate money acquired through corrupt means. Naturally, the secrecy associated with the bank accounts in such places is central to the issue, not their low tax rates as the term ’tax havens’ suggests. Remember Bofors and how India could not trace the ultimate beneficiary of those transactions because of the secrecy associated with these bank accounts? IS THERE ANY ONE WHO WOULD SAVE INDIA ?God... No No No, even he can’t..........!!

Source:-www.merinews.com

>High volumes not bullish always!!

Volumes say diffrent things at diffrent times:)

An important concept that many traders miss is that heavy volume is not always bullish.

Heavy volume is valuable during a breakout or at an important low. However, heavy volume with no substantial movement signals that one party is "distributing" the stock to another.

When there is heavy volume AFTER a strong uptrend, it's usually institutions distributing stock to retail investors. When you see heavy volume AFTER a long trend low, then it's usually institutions accumulating from retail investors.

Notice the common theme?

Institutions are rarely transparent with their intentions, however, they can't hide the volume they trade:D.

This is time tested thing may not be true always:)

Regards
Rish

>SBI Autopsy:)

SBI chart structure shows 5 up done in hourly time frame also waves followed Elliot principles
W3=1.6W1 ,If this count is correct SBI is heading for a good fall.





Lets talk more about wave counts
Near 1600 5 wave up done
A 1600-1300(Clear 5 down)
B 1300-1548(3 wave)
here in B >>> c=1.6a( looks steep) so lil confusion thrustfull B?
If this wave counts are true SBI is heading for atleast couple of 100's fall.

Lets discuss another wave count

1000-1600 3 wave up

1600-1300 4th wave

now 5 th wave in progress

well if this case is true SBI can touch recent highs again.

lets get little more closer :)

lets take this 5th up

As of now looks like 3 waves done and 3=1.6(1 ) followed clearly so 4th can start anytime,
Before 5th up.

One important conclusion after this wave talk

SBI is headed for some fall. How much?

We will see in coming days this second count fails if we go below 1400.

Regards
Rish

Siachen The greatest Pride:)

Siachen – Indian Army’s trump card and greatest pride……Siachen battle was the show cased of all high altitude battle. Indian Army regained the respect in high altitude fighting that it lost in 1962 Chinese war. At 6,300 meters (20,700 feet) India controls these breathless heights and is reluctant to back off for alarm that Pakistan might walk in. Indian troops geared up in the extreme conditions of Siachen sector. The Pakistanis cannot get up to the glacier, while the Indians cannot come down. :)
Lets respect the effort of those you have sacrificed their present for our future.
“Responsibility is the price every man must pay for freedom."



Few facts about Siachen

Toothpaste freezes in its tube, speech can be blurred, frostbite and chilblains are common and plummeting temperatures can leave scores dead.

The fact is the human body continuously deteriorates above 18,000 feet and with winter temperatures of 70 degrees below zero, the inhospitable climate in Siachen has claimed more lives than gunfire.

Do leave your comments

Regards
Rish


PS:- My father served in "ARMY"