I am just out of markets for a while concentrating on some project work, since only trading helps. US Fed has brought the rates to 0.25% the lowest and almost the next step could be follow Japan's way, of charging interest for keeping funds with Fed! Interest rate is a tool of monetary measures, which alone cannot stop recession, or revive economy, which I advocated some time back, now the prognosis has proved to be right.
US economy is suffering from excesses of past decades, and the protectionist approach it had to tourism after 9/11 incidents. Over leveraging by individuals and institutions, have spurred growth for some time, when defaults started haunting, every thing is collapsing like 'pack of cards'.
The real problem can be solved by prudence in spending and creating congenial atmosphere for growth, employment, productivity etc., which can revive US economy and inturn the world economy too, as it is the major part of global economy. US dollar being the defacto currency of the world trade, will influence the balance of payments of other countries to a large account.
Whether Indian markets especially Sensex closes above 10000 level at the year end will be crucial for knowing the trend for next year, corresponding level on Nifty shall be 3000!
Indian rupee has formed a tripple top at 50.50-50.70, which might bring some inflow of dollars in to indian economy and markets. Watch for the exchange rate movement for clues of our markets revival too.
Happy Trading!
