A quick note on the state of the market.
What has happened in the last 1 month or so.
- Nifty breaks out above 17400 and has moved up to 18400.
- Bank Nifty breaks out above 39500 and is at 42500. ( Do check our report in June 2022 )
- US Inflation and Inflation around the world giving signs of Peaking out.
- Dow Jones and most Global Indices up 12-17%. Reducing the extent of India outperformance.
- Dollar Index from 113 to 106.
- In this whole 1 month move the Smallcap Indices and Midcap Indices are at the same price for a month.
- Earnings Season over.
- Even in the top Nifty50, Nifty 100, Nifty 500. Most stocks have underperformed the Nifty.
- VIX is now back to April ( recovery ) and pre Russia Ukraine crisis zones. Reduced Fear.
- Selective Sectoral moves in Shipyard, Defense, Railys but more so PSU.
- Basically some Index stocks up and everything else is flat.
Lets look at some charts
VIX Back to pre Russia Ukraine
BSE Smallcap Index Flat – Nifty up from 17400 to 18400.
Most midcap and smallcap indices similar.
Dollar Index – Structure Broken.
A major top made and a big downtrend or sideways is the question.
US Equities outperformance to the World continues.
US equities have been outperforming their international counterparts for nearly 15 years, and by a significant margin.
As a result, a ratio of the S&P 500 to the rest of the world (MSIC World ex-US) ended October at its most extreme level in history.
https://compoundadvisors.com/2022/week-in-charts-11-11-22
Conclusion
- The market is pretty dull but there is a saying Never Short a Dull Market.
- Overall trend continues to remain up but the momentum is missing.
- Time to be stock specific and continue to any new emerging themes.
- The bias remains Bullish but a Consolidation and a Dull Period is also needed.
- Will be watching for momentum in Smallcap space going forward.
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