Economy: Why is US Fed taper fear affecting only India?

Following is the news that we have been hearing on news channels and other media:

Bonds, rupee fall as Fed stimulus fears re-emerge

Reuters Nov 11, 2013, 09.48AM IST

MUMBAI: Rupee hit a two-month low and bond prices slumped after a stronger-than-expected U.S. jobs report raised concerns the Federal Reserve could start winding down its monetary stimulus as early as this year.

We have been coming across news that is trying to justify the recent selloff seen in Indian equity markets and the depreciation seen in Indian currency. Please read the above news again and carefully. The first statement shows that US job posted stronger than expected jobs data.Logically, this is positive and world market should react upside. On the same very day DJIA – US markets was up by more than 160 points, Hang Seng (Hong Kong) was up by more than 200points and most of the widely followed world markets were positive more than 1% except India. So Is the FED taper fear not affecting their equity markets but only India’s? With all due respect, I sometime find the news illogical that tries the fit the news on each and every price movement of equity markets.

The problem is there is lack of taking a step ahead and trying to understand that why should Indian market only close in red due to FED tapering fear when the US market itself and other major world markets are cheering better than expected jobs data?

It is therefore necessary to use other objective tools that give probabilistic outcome based on specific patterns. This theory is called Elliott wave and we take a step ahead and apply Time cycles as well which suggested that the down move was due when Nifty was trading near 6300 and again reconfirmed it near 6200 – 6250. See it yourself in below charts.

Nifty 10 mins shown on 5^th November

Nifty 60 mins chart shown on 8^th November morning:

Wave Analysis:

In previous update we mentioned that, “In short, prices are now at very crucial support zone between 6200 – 6220. A move below 6200 will intensify the selling pressure and downside momentum. … as per Time cycles 11^th November marks an important topping cycle.”

We have been bearish all the while from 6300 and then re-iterated below 6200. Today’s low made on Nifty 6012 so far! In the daily research report we also mentioned about USDINR up move along with the down leg in Indian markets. The above charts need little explanation and justification why we have been bearish all the while against the thinking of news that comes out post market movement rather than before it happened which ideally does not help a trader!!!

Think for yourself and apply objective techniques. “The Financial Waves Short term update” has Nifty and 3 different stocks clearly explaining our stand on markets. In addition if you have any doubts you always have access to our research team for any query resolution. Visit http://www.wavesstrategy.com/index.php/store.html for subscription options.