Markets BROKE DOWN? Post Market Report 06-Sep-24
Summary
TLDRIn the 'Post Market' report, the host discusses the market's sharp decline, drawing an analogy to a cricket stadium's sudden evacuation. He attributes the drop to global recession fears and the US jobs data, as well as a potential liquidation of positions by FPAs due to CBI notices. Despite significant falls in Bank Nifty and Sensex, the host suggests a recovery is possible if the US market rebounds and Nifty closes above 25,000. He advises traders to exit long positions if Nifty falls below 24,000, but to hold if it recovers, with a focus on the closing levels for future market direction.
Takeaways
- 📉 The market experienced a significant downturn, with key technical levels like 25,800 and 24,975 being broken, leading to a 'free fall' scenario.
- 🌐 Global cues played a role in the market's performance, with recession fears and negative US market trends contributing to the downtrend.
- 📈 Despite the downturn, the speaker suggests that US markets might recover as they are considered oversold, which could positively influence the market on the next opening.
- 🏦 The CBI's notice to FPIs (Foreign Portfolio Investors) to disclose beneficial owners or face liquidation might have triggered a sell-off, contributing to the market's sharp decline.
- 📊 Bank Nifty and Sensex both fell over 1,000 points at some point, indicating a broad-based market sell-off.
- 📆 The market's downturn occurred on a Friday, which is typically a lighter trading day due to lower option positions, potentially mitigating the impact.
- 💡 For traders, the speaker advises exiting long positions if the Nifty index falls below 25,000 and to reassess if it closes above this level on subsequent trading days.
- 🔍 The speaker anticipates that if the US jobs data is not negative and the US market recovers, it could lead to a rally in the Nifty index.
- 🚫 The speaker warns that if the Nifty closes below 24,000, it would signal a bearish trend and advise traders to exit their positions.
- ⏰ The market's reaction to the CBI's notice and the potential for further selling by FPIs is uncertain and requires monitoring, with more insights to be discussed in subsequent market analyses.
Q & A
What is the analogy used to describe the market behavior?
-The analogy compares the market to a cricket stadium where people slowly fill the stadium before a match, but if there's a sudden emergency, everyone tries to exit at once, leading to a stampede. This illustrates how markets can rise gradually but fall rapidly when key technical levels are broken.
What are the two technical levels mentioned in the script that are significant for the market?
-The two technical levels mentioned are 2,58,000 and 24,975. These levels are crucial as they act as support, and when they are broken, it can trigger a significant market sell-off.
What global factors are contributing to the market's negative sentiment according to the script?
-The script mentions recession fears and the anticipation of monthly jobs data as global factors affecting the market's sentiment. Additionally, the European markets have been falling for five straight days, contributing to the negativity.
What is the potential impact of the CBI's notice to FPAs as mentioned in the script?
-The CBI has reportedly sent a notice to certain Foreign Portfolio Investors (FPAs) to disclose their beneficial owners. If they fail to do so by Monday, their positions may be liquidated, which could lead to offloading of shares and contribute to the market's drastic fall.
How did the script describe the difference between the market's rise and fall?
-The script uses the phrase 'markets go up by stairs and come down by lift' to describe the gradual rise and sudden fall of the market. It also mentions 'come down by Bullet rain' to emphasize the speed and severity of the market's decline.
What is the significance of the market falling on a Friday as per the script?
-The script points out that the market fall on a Friday is less impactful because option sellers typically have lighter positions on Fridays compared to Tuesdays, Wednesdays, and Thursdays. This means the fall could have been more severe if it occurred on a day with heavier positions.
What was the reaction of the US markets to the jobs data as mentioned in the script?
-According to the script, the US jobs data was not as bad as feared, leading to a recovery in the US markets. The S&P 500 futures turned positive, and NASDAQ and Dow were also showing signs of recovery.
What advice does the script give to traders regarding their long positions?
-The script advises traders to exit their long positions if the Nifty index falls below 25,000. It suggests waiting for the market to close above 25,000 on Monday to consider reentering or holding long positions.
What is the significance of the Nifty closing above or below 24,000 according to the script?
-The script indicates that if the Nifty closes below 24,000, it could signal a bearish trend. However, if it closes above 25,000, it may suggest that the rally could continue.
What is the potential impact of FPAs selling on the market according to the script?
-The script suggests that while FPAs might sell due to the CBI notice, domestic institutions are likely to match the selling, potentially mitigating the impact. However, the extent of the selling and its impact remains uncertain until more data is available.
Outlines
📉 Market Volatility Explained
The speaker begins by likening the market to a cricket stadium, explaining how markets can rise slowly as people gradually take long positions, but fall quickly when everyone tries to exit at once, similar to a bomb scare causing a stampede. The discussion then shifts to the recent market downturn, attributing it to two main factors: global economic concerns, including recession fears and negative market trends in the US and Europe, and local issues such as the CBI's notice to FPAs (Foreign Portfolio Investors) to disclose beneficial ownership, which has led to share offloading. The speaker also notes the significance of key technical levels being broken, particularly the 25,000 mark in the Nifty index, which triggered a sharp sell-off. The conversation concludes with an analysis of the market's potential recovery, suggesting that the US markets' response to job data could influence the direction of the market on the following Monday.
📈 Navigating Market Trends and Strategies
In this segment, the speaker advises traders on how to manage their positions in light of the market's recent movements. They suggest that long positions should have been exited when the Nifty index fell below 25,000, a key technical level. The speaker provides guidance on re-entering the market if the Nifty crosses back above 25,000 and emphasizes the importance of monitoring the market's closing levels. If the Nifty closes below 24,000, it's a signal to exit positions, indicating a potential trend reversal. The speaker also addresses the uncertainty surrounding the FPIs' response to the CBI's notice and its impact on the market. They conclude by inviting viewers to join them for further discussions on the topic in upcoming programs.
Mindmap
Keywords
💡Post Market
💡Technical Levels
💡Long Position
💡Recession Fear
💡FPA
💡Liquidation
💡Bank Nifty
💡Sensex
💡Option Sellers
💡Bearish
Highlights
Market dynamics are compared to a cricket stadium scenario where people slowly fill in but exit quickly, leading to potential chaos.
Markets rise gradually but can fall sharply, similar to climbing stairs versus taking an elevator or being hit by bullet rain.
Technical levels of 25,800 and 24,975 are identified as key, with the latter being particularly significant for market behavior.
When key technical levels are broken, there is a rapid market decline as investors rush to exit positions.
Global cues are negative due to recession fears and the anticipation of monthly jobs data, affecting market sentiment.
The European market has been falling for five consecutive days, contributing to the overall negative trend.
CBI's notice to FPAs to disclose beneficial owners by Monday or face position liquidation is a significant event impacting the market.
Some FPAs may be offloading shares to avoid disclosing beneficial ownership, contributing to the market decline.
Bank Nifty and Sensex have seen significant drops, with the latter falling over 1,000 points at one point.
The market correction on a Friday is less impactful as option sellers typically have lighter positions.
US jobs data came out not as bad as feared, leading to a recovery in US markets.
S&P 500 and NASDAQ are turning positive, suggesting a potential rally in the market.
GI Nifty is recovering, indicating a possible market rebound if US markets close positively.
Traders should have exited long positions when 25,000 was broken, according to the advice given.
If Nifty closes above 25,000, it may indicate a continuation of the rally, allowing traders to reenter long positions.
If Nifty closes below 24,000, it's a signal to exit positions as the market trend may be broken.
The market's closing position is crucial for determining the next steps for traders.
The situation with FPAs and potential selling pressure is uncertain and requires further clarification.
Domestic institutions are expected to match any selling pressure from FPAs, but the exact impact is yet to be seen.
The market's technical status is still uncertain, with Nifty closing close to but not below the bearish threshold.
Transcripts
fine this is PR welcome to post market
report sponsored by delta.
exchange uh what a fantastic
fall uh you know my friend used to give
me an analogy if there's a cricket
stadium and the cricket match starts let
us say at 6: p.m. from 3 p.m. onwards
people slowly come and slowly fill there
are about 50,000 seats in a
stadium by 545 550 if everybody comes if
suddenly there is a bomb scan and
everybody want to exit at the same time
sorry so when the people come in they
come slowly when they want to exit they
want to exit everybody at one go that
can lead to a
stampage like that you know the market
going higher and higher and slowly
people come and take long position long
position and one day Market Falls like
this everybody want to exit the position
and especially when the key technical
levels are broken today morning I told
you there are two technical levels one
is
25,8 which was uh you know two days
before low as well as last time alltime
high the second one is a
25,000 or to be precisely
24975 you know while you know Nifty
became long when it crossed that when
the both the levels are broken
especially when the second major level
was broken there was a free fall in the
market so this is how markets Behavior
so that's why the people say you know
the markets go up by stairs come down by
lift and sometime it come down by Bullet
rain so that's the issue uh today there
are two major reasons number one anyway
the global CES are not good and the US
markets you know they were worrying
about the recession fear and then you
know uh today is a monthly jobs data
ahead of that you know Global markets
were very much negative today afternoon
Europe was down for five straight days
five straight days are falling you know
the recession fear also people have seen
what happened in the August first week
they were worried something like that
can happen now that was one big issue
second big issue is that it seems that
CBI has sent a notice to uh some fpas to
disclose their beneficial
owners and if they fail to do by Monday
so probably their positions may be
liquidated so probably some fpas they do
not want to uh really show their
beneficial owners so therefore they are
offloading the shares so this is the
news as person media so probably the
second reason is more you know uh more
of a big reason for Market such a
drastic fall today and then Bank Nifty
has fallen more than th000 point at some
point of Time sensex Has Fallen more
than 1,000 point at some point of time
you know this is a reality check for the
crazy Bull
Run luckily this has happened on a
Friday when usually uh option sellers
have a very very light position and
people usually take heavy positions you
know Tuesday Wednesday and Thursday and
Friday usually the positions are less
otherwise the fall could have been even
bigger so if this has happened on
Thursday the you know the problem could
have been much bigger the US jobs data
came just now I think around 6: p.m.
about half an hour before I think it
looks not really very bad so because of
that us markets are uh recovering uh
right now you know uh S&P 500 Future Has
Turned positive and NASDAQ is about to
become positive and uh Dow we don't not
know so let me check yeah so D also
coming to slightly positive
territory and I believe that you know us
markets are extremely oversold and
European markets also any kind of short
covering you know Market can rally uh
even
bigger so already GI Nifty
you know right now it getting about 60
65 point higher and then if the US
market firly closes positive and then
you know Monday we can open uh higher
closer to 25,000 in Nifty
future then another 50 60 point rally
the Nifty can close above 25,000 on
Monday I may remember on the way down
you know although 24,000 was the support
one day Nifty actually closed below
24,000 and and significantly below
24,000 then the next day it closed above
24,000 uh the actual closing was above
24,000 but weighted average was slightly
below and then the rally continued so
the same way uh if you're a Trader I
think by this time you should have
exited your long positions because I
told you clearly in the morning when
25,000 broken it is time to exit the
Longs so if you exited long nothing to
worry because the markets have fallen
even more on the way up if Nifty crosses
25,000 you can reenter
actually right however if you have not
uh exited your Longs you know Monday you
wait for the closing if the closing is
above 25,000 you can continue to hold
your long positions you know the rally
may assume if market closes below
24,000 definitely that is time to to
exit your positions so that you know
that the trend will be uh broken so in
fact today uh Nifty if the Nifty has
closed below
24820 then you know technically nift is
becoming bearish but that has not
happened but it went very close to that
in fact I think it has broken that level
also but on a closing basis it Clos
slightly higher so therefore know we
still give the the benefit of Doubt so
if everything goes well you know then we
may recover but again the FBI thing
maybe uh somebody has to clarify so we
don't know how much more of selling can
come from fpas uh but you know no matter
how much selling come from fpas domestic
institutions will match but today the
data is still not out so we will discuss
on Monday morning or during the program
on Sunday so I hope you enjoyed watching
this video thank you for watching
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