Japan in recession

After Europe, it is the turn of Japan to fall in recession. The third quarter reading is lower, nudging Japan into recession for the first time in seven years. Next quarter reading of US will also show that it’s GDP has started contracting. Although we were skeptical from the beginning, markets had high hopes from G20, and the expectations are belied.



Our Volatility Index reached to an all time high level of 70.62% on Thursday indicating market players are very jittery and expecting high volatility to continue in the days to come. Index has formed a lower top and lower bottom formation, indicating continued bearish trends. Unless Sensex closed above 10570, the pattern hold true. Broader markets are not looking as weak as the benchmark indices and breadth could turn positive one of these days, even though indices are in red. The support for the sensex comes in at 9060 and for the nifty at 2700. RBI has taken slew of steps to ease the liquidity situation especially for real estate sector. We would look to cover shorts at lower levels.