Economic Reports for Next Week

Monday: November construction spending is due shortly after the start of trading. Spending is expected to have fallen 1.2% in November after falling 1.2% in the previous month.

Monthly truck and auto sales figures are due throughout the session.

Tuesday: The Institute for Supply Management's survey of the services sector of the economy is due shortly after the start of trade. The December index is expected to have dipped to 37 from 37.3 in November, remaining deep in recessionary territory.

The government's November factory orders report is due around the same time. Orders are expected to have fallen 2.6% after dropping 5.1% in October.

Data on November pending home sales, a leading indicator of housing market activity released by the National Association of Realtors, is due out at 10 a.m. ET. In October, he number of homes under contract to be sold fell by a mere 1% year over year. Analysts had expected pending sales to slip by 3.6%.

Also, the Federal Reserve will release the minutes from its Dec. 15-16 policy-making meeting. At that meeting, the Federal Open Market Committee established a target range for the federal funds rate of 0% to 0.25% and said it would likely keep rates at that level for some time.

Wednesday: The House Financial Services Committee meets to discuss how the next administration might make use of the remaining TARP funds, amid criticism that the $700 billion bailout has not been working.

Also Wednesday, a House panel holds an economic recovery plan hearing that will feature testimony from some of the nation's top economists.

Thursday: The nation's chain stores will be releasing December sales reports, giving investors a better sense of how badly the consumer has been hit amid the recession.

Separately, the Fed is slated to release its monthly consumer credit report at 3 p.m. ET. Consumer credit, a measure of consumer borrowing, for November is forecast to show an increase of $0.5 billion. In October, consumer credit fell by $3.6 billion

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Daily Indices (same-day expiry): FTSE, Dow; FTSE Futures, Dow Futures; S&P Futures, Nasdaq 100 Futures; DAX 30 Futures, CAC 40 Futures

Indices settled on a fixed date in the month: FTSE Futures, Dow Futures; FTSE/Dow Differential; DAX 30 Futures, DAX/FTSE Differential; CAC 40 Futures, IBEX 35 Futures, MIB 30 Futures, SOFFEX Futures, S&P 500 Futures, Nasdaq 100 Futures, Nikkei 225 Futures, Hang Seng Futures, Eurostoxx Futures.

Single Quarterly and Weekly Shares: FTSE350 and others, Eurostoxx 50; US stocks, Dax 30 Futures.

Economic Groups Indices: Resources, Utilities, Information Technology, Financials.

Sectoral Indices: Mining, Oil & Gas, Chemicals, Aerospace & Defence, Beverages, Food Processors & Producers, Pharmaceuticals, Tobacco, General Retailers, Leisure, Entertainment & Hotels, Media & Photography, Restaurants Pubs and Breweries, Transport, Food & Drug Retailers, Telecommunication Services, Electricity, Gas Distribution, Water, Banks, Insurance, Life Assurance, IT Hardware, Software & Computer Services.

Currencies: GBP/USD, EUR/$, EUR/GBP, USD/Yen, USD/CHF, GBP/Yen, GBP/CHF, EUR/Yen, EUR/CHF, Yen/USD, AUD,USD, CAD/USD.

Interest Rates: Eurodollar, Short Sterling 3-month, Euroswiss, Euribot

Bonds: Bund Futures, Bobl Futures (German), T-Bond Futures (US), Gilt Futures (UK), JGB Futures (Japan), 10-Year Note (CBOT).

Options: Indices (FTSE 100, Wall Street Futures, DAX 30 Futures, S&P 500, Nasdaq 100 Futures); Bonds (Bund, T-Bond, Gilt Futures); Interest Rates (Eurodollar, Short Sterling 3-month); Currencies (Yen/USD, CHF.USD, EUR/USD, GBP/USD all IMM); Metals (Gold, Silver); Oils (Light Crude).

Commodities: Brent Cruse Oil, NYMEX Crude, Orange Juice, Corn, Cotton No.2, Live Cattle, Unleaded Gasoline, Wheat.

Metals: Gold, Silver, Platinum.

Movies: Wagers on the final movie revenue on the first weekend or four weeks, first weekend supremacy or four week supremacy (i.e. gross takings from first day of release, rounded up or down to the nearest half-million).

Did we reach the bottom yet?

Is it time to buy stock? Ever since mid-September, we have read that the bottom is in because investors have "panicked" and "capitulated." But market history does not support this widespread view.


Here's part of Bob Prechter's explanation from his latest Elliott Wave Theorist:


"Ever since mid-September, we have read that the bottom is in because investors have 'panicked' and 'capitulated.' But market history does not support this widespread view. A perusal of volume data since January 2008 shows that, despite claims to the contrary, investors actually have not panicked. Here's why: In a market panic, the number of shares traded increases substantially on down days and bottom days. In October 1929 and in October 1987, for example, daily volume surged to between triple and quadruple the preceding summer’s average as prices plummeted. In contrast, volume recently has been quite steady, aside from two spikes."

Nifty Futures Live Charts

The Nifty Future Buyer Vs Sellers Chart

When Sellers ( Red Line ) are Moreeee Nifty feel more pressure and chances is that it will go down.

When Buyers ( Blue Line ) are Moreeee chances of Nifty going UP is quite high.

Try this graph your self , Hope you will learn to make profit by following the buy sell trend.

Sell Nifty When huge sellers are there.

Buy Nifty When Huge Buyers are there.

http://www.niftylivecharts.com/nifty_future_live_chart.html

Financial Markets May be Shutdown

New York University Professor Nouriel Roubini said curbs placed on U.S. futures trading today shows his prediction that markets will be shut down amid panic selling is coming true.

``This morning, even before the markets in the U.S. opened, the S&P futures fell by more than their daily limit,'' resulting in curbs on futures trading, Roubini told a conference in Madrid today. ``What I said yesterday has already started.''

Roubini said yesterday that policy makers may need to shut down financial markets for a week or two as investors dump assets. Trading in futures on the Standard & Poor's 500 Index and the Dow Jones Industrial Average was limited today after declines of more than 6 percent. Trading of U.S. stocks would be suspended for an hour should the Dow Jones Industrial Average decline 1,100 points to 7,591.25.

``Things are getting worse, they are not getting better,'' Roubini said. There's an increased risk of a ``multi-year economic stagnation'' in the U.S. and ``we have a whole set of emerging market economies in trouble. Even a few of them going bust may cause systemic trouble.''

Russia's RTS exchange today stopped trading after stocks slumped more than 10 percent. Europe's Dow Jones Stoxx 600 Index slid 8.5 percent. The MSCI World index of global stocks has lost 45 percent this year as the fallout from the U.S. housing crisis toppled banks from Seattle to Paris.

Great Depression

Still, Roubini said he doesn't expect the economic consequences of the current crisis to be as severe as the Great Depression. ``During the Great Depression, output in the U.S. fell by more than 20 percent, I don't believe that's going to be the case,'' he said.

In July 2006, Roubini predicted the financial crisis. In February this year he forecast a ``catastrophic'' meltdown that central bankers would fail to prevent, leading to the bankruptcy of large banks exposed to mortgages and a ``sharp drop'' in equities.

Roubini said that the European Central Bank should provide ``much more monetary easing'' and governments around the world must put together a massive fiscal stimulus package after action so far failed to halt the stock-market rout. The U.S. bank bail- out plan will likely require between $600 billion and $700 billion, he said.

Roubini, a former senior adviser to the U.S. Treasury Department, said earlier this month that the world's biggest economy will suffer its worst recession in 40 years.

US Markets - DOW JONES Mood

A few market players are really able to push prices around. A "big crash" would be a down day on big volume. We are in the midst of leg #2 down with 1 remaining.

Could this be a market of fear and disinterest? Longer term players with stronger hands have left the field to shorts, hedge funds, and other players? We are in very interesting times.

US Markets - Dow Jones

What will be the lowest close for the DJIA in 2008?

Credit Default Swaps

Credit-default swaps are complex financial instruments based on bonds and loans that are used to speculate on a company's ability to repay debt. Their value falls as investor confidence increases. Recently, many credit-default swaps collapsed along with the market for mortgage backed securities. This is what prompted the government fearful that the entire credit-default market would unravel to lend $85 billion to insurer American International Group, one of the world's biggest insurers of the bonds.

Example ABC Inc.

1) Investor buys a bond from ABC Inc.

2) The investor gets insurance for the bond by paying a bank a fee, usually as a percentage of the value of the bond.

3) Bank insures the bond for the investor and agrees to pay the investor the value of the bond if


ABC Inc. defaults.

Among the risks:

The bank may not have the assets on hand to pay the investor if ABC Inc. defaults

The investor may be speculating that ABC Inc. will default and use the transaction to make a profit

The credit-default swaps on ABC's debt in the market may exceed the value of ABC's bonds many times over.

Credit Crisis Indicators

The credit markets are a more important measure of the severity of the financial crisis than the stock markets, as Henry Paulson, the Treasury secretary, and others have noted.

Below indicators are used to measure credit crisis

Treasury Bills

Libor Rates

Ted Spread

Commercial Paper

High Bond Yeilds

For credit crisis indicators daily movement check out on nytimes.

http://www.nytimes.com/interactive/2008/10/08/business/economy/20081008-credit-chart-graphic.html

US Markets Live

US markets commentary live on

http://stage.theflyonthewall.com/entry.php?symbol=NOSYMBOL

Trading Options

Trading Categories

Equities

Large Cap stocks - low risk, medium returns

Small Cap Stocks - medium risk, medium returns

Derivatives

Futures - High risk, medium - high returns

Options - High Risk, High Returns

Credit Default Swaps - The Next Wallstreet Bomb

On Main Street, insurance protects people from the effects of catastrophes.

But on Wall Street, specialized insurance known as a credit default swaps are turning a bad situation into a catastrophe.

When historians write about the current crisis, much of the blame will go to the slump in the housing and mortgage markets, which triggered the losses, layoffs and liquidations sweeping the financial industry.

But credit default swaps -- complex derivatives originally designed to protect banks from deadbeat borrowers -- are adding to the turmoil.

"This was supposedly a way to hedge risk," says Ellen Brown, the author of the book "Web of Debt."

"I'm sure their predictive models were right as far as the risk of the things they were insuring against. But what they didn't factor in was the risk that the sellers of this protection wouldn't pay ... That's what we're seeing now."

Brown is hardly alone in her criticism of the derivatives. Five years ago, billionaire investor Warren Buffett called them a "time bomb" and "financial weapons of mass destruction" and directed the insurance arm of his Berkshire Hathaway Inc (BRKa.N: Quote, Profile, Research, Stock Buzz) to exit the business.

LINKED TO MORTGAGES

Recent events suggest Buffett was right. The collapse of Bear Stearns. The fire sale of Merrill Lynch & Co Inc (MER.N: Quote, Profile, Research,Stock Buzz). The meltdown at American International Group Inc (AIG.N:Quote, Profile, Research, Stock Buzz). In each case, credit default swaps played a role in the fall of these financial giants.

The latest victim is insurer AIG, which received an emergency $85 billion loan from the U.S. Federal Reserve late on Tuesday to stave off a bankruptcy.

Over the last three quarters, AIG suffered $18 billion of losses tied to guarantees it wrote on mortgage-linked derivatives.

Its struggles intensified in recent weeks as losses in its own investments led to cuts in its credit ratings. Those cuts triggered clauses in the policies AIG had written that forced it to put up billions of dollars in extra collateral -- billions it did not have and could not raise.

EASY MONEY

When the credit default market began back in the mid-1990s, the transactions were simpler, more transparent affairs. Not all the sellers were insurance companies like AIG -- most were not. But the protection buyer usually knew the protection seller.

As it grew -- according to the industry's trade group, the credit default market grew to $46 trillion by the first half of 2007 from $631 billion in 2000 -- all that changed.

An over-the-counter market grew up and some of the most active players became asset managers, including hedge fund managers, who bought and sold the policies like any other investment.

And in those deals, they sold protection as often as they bought it -- although they rarely set aside the reserves they would need if the obligation ever had to be paid.

In one notorious case, a small hedge fund agreed to insure UBS AG (UBSN.VX: Quote, Profile, Research, Stock Buzz), the Swiss banking giant, from losses related to defaults on $1.3 billion of subprime mortgages for an annual premium of about $2 million.

The trouble was, the hedge fund set up a subsidiary to stand behind the guarantee -- and capitalized it with just $4.6 million. As long as the loans performed, the fund made a killing, raking in an annualized return of nearly 44 percent.

But in the summer of 2007, as home owners began to default, things got ugly. UBS demanded the hedge fund put up additional collateral. The fund balked. UBS sued.

The dispute is hardly unique. Both Wachovia Corp (WB.N: Quote, Profile,Research, Stock Buzz) and Citigroup Inc (C.N: Quote, Profile, Research,Stock Buzz) are involved in similar litigation with firms that promised to step up and act like insurers -- but were not actually insurers.

"Insurance companies have armies of actuaries and deep pools of policyholders and the financial wherewithal to pay claims," says Mike Barry, a spokesman at the Insurance Information Institute.

"SLOPPY"

Another problem: As hedge funds and others bought and sold these protection policies, they did not always get prior written consent from the people they were supposed to be insuring. Patrick Parkinson, the deputy director of the Fed's research and statistic arm, calls the practice "sloppy."

As a result, some protection buyers had trouble figuring out who was standing behind the insurance they bought. And it put investors into webs of relationships they did not understand.

"This is the derivative nightmare that everyone has been warning about," says Peter Schiff, the president of Euro Pacific Capital at the author of "Crash Proof: How to Profit From the Coming Economic Collapse."

"They booked all these derivatives assuming bad things would never happen. It was like writing fire insurance, assuming no one is ever going to have a fire, only now they're turning around and watching as the whole town burns down."

Market Analysis

http://thebullishbear.blogspot.com/2008/05/first-five-months-of-2008-have-been.html

Crash Course on Day Trading

http://www.stockmarketsensex.org/sensexupdate/day-trading/a-crash-course-to-the-basics-of-day-trading/

Good Stock Trading Tips

http://www.tech-reliance.co.in/

Trading Tips

http://indianstockstradingforum.blogspot.com

POSITIVE CRUDE EFFECT

Investors should preferably invest in companies like
ONGC,
Reliance Industries and
Cairn India,
Particularly if oil continues to scale higher levels. Some other sectors that would be positively impacted because of high crude prices are oil rig companies like
Great Offshore,
Aban Offshore

and ancillaries like
Selan Exploration and
Shiv Vani Oil.

Shipping companies
Varun Shipping,
Shipping Corporation of India,
GE Shipping and
Essar Shipping, which carry crude, are also likely to benefit as demand will be higher.

Day Trading

Need to follow world markets

http://money.cnn.com/data/world_markets/index.html
http://www.marketwatch.com/
http://www.bloomberg.com/index.html

Day Trading Tips

http://www.nsestocktips.com/index.html
http://agvikram.blogspot.com/2008/05/7th-may-2008.html
http://www.marketbhavishya.com/stock.htm

Indian Market Live

http://money.rediff.com/money/jsp/markets_home.jsp
http://nseindia.com/

Market Education

http://www.capitalmarket.com/bulletin/indices/chapter8.htm

Long Term Stock Investments

Go for Diversified Portfolio
Go for demerger stocks in the long run
Go for mixed portfolio – Couple of BSE 30 and Couple of high risk stocks
Always buy when everyone is selling. Buy when sensex falls and sell when sensex rises