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Emerging markets are surely in a bubble phase right now (I am sure it’s a “bubble” while rest may say “could be”).
So, now big boys are telling us that there is a possibility of bubble in emerging markets. Well, it can’t be more timely than this especially after Friday’s sell-off in US stock markets which world-wide markets gracefully embraced (except India which was up-n-down throughout the session). Read story for warning! C’mon guys, tell us something new. My fellow bloggers have been saying this for months, day-in-day-out. Everyone in the blogging community, at least, knows that there is a bull run in BRIC, and yeah did I say also in developed markets like Hong Kong and Singapore (many will disagree for calling it mature). Since my last post, Hong Kong is already romancing on moon with billions aboard. Need any more proof, check out FXI, SNP, PTR and many more.
If you really want to know what is it like being in bull market, here is a chart of Japan’s Nikkei (History repeats, at different places if not the same). China and India are also pretty much on the same meteoric rise. Of course closer to home was a recent massive bull run in US (1985 till 2000). So why to doubt that this can’t happen in emerging markets, it will. But too soon is not sustainable and that is what we are currently going through. It has to correct, relax its muscle and gather steam before it rise further (Mumbai’s sensex to rest at something like 17,200, 16,600, 16,000 and finally around 15,200 in case it corrects further and can’s detach itself from US). But it is bound to rise. It’s also not extreme to think Mumbai sensex doubling vs where it is now in a few years time (Call me insane but that’s what I think). Only caveat is the ‘politics”!
Markets are at crossroads, don’t trade it if you can’t handle volatility which I guess will continue till fed meeting,
Profitable trading, OP