The Roller Coaster

Global Markets have been on a Roller Coaster ride like never before since 2005. The period 2005 – 2007 saw us pulling up slope after slope, with occasional minor drops which helped gather momentum and added to the thrill, all along. A period that had all the Bulls enjoying as they speedily raced away from the Bears, left waiting at the lows. And then, came the big one…

Pushed hard by FIIs, DIIs, HNIs, Hedge Funds, momentum players & retail investors the Roller Coaster made a big steep climb all the way to a top of 21000 by early January 2008 – a level that needed a lot more momentum to cross, which the system could not provide. And that led to a steep fall, all the way to 8000. While all Bulls were gasping for breath the Roller Coaster hit a bottom and started climbing again…

This time the climb was propelled initially by DIIs, Hedge Funds and an unprecedented Election outcome. Soon enough FIIs and ETFs joined in gleefully. Any surviving HNIs and Retail investors, looked skeptically at the slope ahead and felt that it was too early to have a big rise again and that having woken up to the reality of the next slope only around 16000 levels, this could not be as big a climb as the last one. And so they sat around to watch the gyrations around 16000 to 17000 levels, each thinking that the ride was almost over. However, now almost everyone can see one more slope ahead, and wants to enjoy the thrill of being on this one…

So where do we stand on this one? We are at 17200 and are seeing more participation again. Practically everyone who was riding in 2007 is back to enjoy the ride. The one missing participant since the last descent from 21000 has been the retail investor. The Roller Coaster has waited long enough in a range, for him to regain consciousness & enjoy the ride. Volumes and momentum have been built selectively and pockets of opportunity are visible amongst mid-caps & sectors that have either not performed or have burnt out in this rise. IPO plans in Realty, PSU, Power, Telecom - promise to take away whatever savings might still have remained with the Retail investor. The stage is hence set for the Retail investor to enter and Cats & Dogs are set to fly…

Fasten your seat-belts and prepare yourself for 2010. If you thought that the Roller Coaster ride was over, think again!

If my intuition and reading of the market forces is correct, 2010 will leave the world gasping for breath and only those with guts of steel should venture into areas they have not mastered. We are in for a ride of a lifetime…