It was a tumultuous week for the markets. The largest weekly loss since October 2008.
The budget kicked it off by not living up to its expectations.
The key trigger for further rally was the Union Budget. It has disappointed sorely. FIIs were net sellers about 2 weeks before the budget also. Budget gave them fresh impetus to sell.
The budget is out of the way and the 2 next triggers are Monsoons and Q1 results.
The monsoons at best this year would be average. This will impact rural demand and also cost the government in relief packages. The fiscal deficit of 6.8% is already quite high.
Q1 results will not be spectacular. Infy has already toned down expectations or rather not made great noises. Ironically in the history of Infy, this is the first time employee strength has actually gone down.
This does not bode very well for consumption or consumer led demand.
Fundamentals dont point to a rally in the immediate future. There may be a small technical bounce though.
The much feared Head and Shoulders pattern seems to be coming through with targets of 3600-3800.
Also, as per Elliot, we would now be in a corrective of the whole upmove from 8047- 15600. Retracement could come to 11823, 10932 or 12714 on the sensex.
This could last for about a month or so.
We have the solar eclipse coming in on July 22nd and lunar eclipse around August 6th. Astrologically, markets tend to fall around this period. There is athe famous Putz crash window.
here is an ineteresting link:
The US markets seem to be flattening and seem to be in a no hurry to go anywhere. Economic data is also mixed pointing to a flat to negative bias.
All the above factors point to a flat to a negative market for next 3-4 weeks. Lets see how things pan out. For now, it remains a traders paradise.