The market has been in a period of substantial price compression
for a month now. It has grown so tight that bull vs bear efforts are
perfectly balanced. Easy to go to sleep on the job. What's worse,
price compression can easily last another month or so, although the
bull vs bear balance may grow more imperfect. But, price com-
pression periods usually lead to major price action when they
break. I think it is very difficult to call the direction of these breaks,
and I know from experience that you can get head faked when the
break comes, because there can be occasions when the first few
days belie the eventual direction. In short, if you are trading, it
can be a frustrating period. But, know that there is action ahead.
SP 500 chart shows the compression.
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MARKET TODAY
Key benchmark indices are expected to start lower tailing weak Asian markets. Investors will keenly watch the inflation data for the month of November 2009 due to be announced by the government today. Investors also fear that a recovery in the economy and a likely surge in wholesale price inflation will add pressure on the central bank to raise interest rates.
According to data released by the NSE, in the last session, FIIs were net buyers of index futures to the tune of Rs 366.37 crore and bought index options worth Rs 42.88 crore. They were net buyers of stock futures to the tune of Rs 67.11 crore and bought stock options worth Rs 6.89crore.
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