I am a Bearish

We folks have a fancy for bear market or slightly bearish trend like what happened y’day.

This fall of 600 odd points on 01-Aug had couple of us cheering away. (No man no drinks. We want to stay sober) You could have found a some of us egging the index to fall a bit more !! A scene that is hard to believe after the tremondous bull run that we have had.Else where on the floor we found couple of folks squaring of long positions in frenzy as they had been caught on a wrong footing. Poor folsk hope they did not loose their shirt.

It is hard to make money unless you have a pretty good call on where the market is heading.Typically we late night owls keep an eye on the DJ (Dow Jones).With the rising market it was bound to fall anyways. But the key point was when it will break free.On 30-July the DJ was flat until the last hour of close. Then there was this sudden free fall of about 100 odd points.

So,the next morning we had this sell trigger and keeping a close eye on the Asian markets confirmed the call.So couple of our folks ventured into selling the Nifty future and needless to say had a windfall gain. Unfortunately for our gang who did not have the financial muscle to get into position in a very short period this was a big opportunity loss.But never the less we liked the bear operators having fun a lot.

But the silver lining was that I was harping on a Put option with couple of like minded folks for a couple of weeks.I had expected the market to correct before the July expiry. But it seems the market was waiting for smoke signals from across the globe. So any one who has had taken a August In-the-money Put option would have seems a good notional profit right now.

So how will the market go from here.Well I am waiting for the BOJ (Bank of Japan) policy.If they raise the Interest rates by another 25 bps then Will suggest to take buy another Put option expiring on Sep as the cumulative effect of FII winding up positions will have a chain reaction that can be seen here. Typically we can see the fission type reaction in about a month from the BOJ announcement i.e in case we have a rate hike. Other wise it will be neutral to slightly bullish.

Hope the BOJ raises the interest rates!!