S & P SHORT INDEX

To understand market perspective we also cover global short indices. Short indices are inverse of the regular market indices and move up if markets fall and vice versa. A view on global short indices can also give us cues whether markets are ready to bottom yet or there is more negativity. The following 4 short indices on S&P500, DOW30, Nasdaq and broad Russell are at extremely low rankings. These means that short portfolios on US markets were the worst performers. And for us at Orpheus, whatever is worst is not going to be the worst in the time ahead.

This means that US Indices might underperform leading to delivery on SHORT portfolios on US indices. This also suggest that it still might be early to look for a bottom on India or emerging markets and the MAR 2012 lows could still be a reality. We are still expecting a weekly positive close above 4750 levels before taking this bounce seriously.

The short S&P Jiseki has an uncanny similarity with what we are observing on BSEAUTO, BSE Health Care and CNXIT Jiseki, which are on the other topping performance extremes. Predicting future is a hard deal, it gets harder when it comes to predicting Time. However, from technicals we have learnt that larger weekly cycles are more important than daily and so on. So as the Jiseki cycle length goes up, it gets more important but poor in senstivity.

This could explain doubts regarding why could Jieski for Short S&P could struggle for another year. On one side this is a correct observation, however, there is another missing aspect here. What could actually happen is also connected with what the Jiseki cycles are doing at the next higher time degree. Remember Jiseki are nested cycles and to understand whether markets are going up for 2012 and then lower, markets are going for few years and then going lower depends on the overall Jiseki complex. When we say “next higher time degree Jiseki” we are referring to moving from multi month to multi quarter Jiseki cycles.

Mukul Pal, CMT, Orpheus Capitals, Global Alternative Research