GENERAL MARKET CONDITIONS

Consumer confidence in US, European and other parts of the world is falling. What does this signify for the US dollar? Unless energy prices fall the US dollar will be volatile against the major currencies. Central banks are being forced to raise interest rates to tackle inflation. Consumers are spending more on essentials and less on other things. Lay off or its expectation is adding to the woes of the consumer. Consumer pessimism is bound to stay afloat. In the end it will all boil down to interest rates differential apart from growth outlook. We expect eurozone growth to fall in time and that the European central bank may not raise interest rates after July. The US dollar will make and slow and steady gains as we near US presidential elections.

The current investment market is a difficult one not just for the fund managers but also for the investors. Since 2003 retail investors have made quick bucks in stock markets and their capital was intact. One of my friends had married in the month of January. He had invested nearly all his savings after his marriage into the Indian stock markets. At present his mark to market (MTM) loss is nearly fifty percent. He is a worried man and asked me whether he will get his capital back on his delivery based equity investments. India is great for long term investments. The current fall is part and parcel of a long term bull rally which has been accentuated by political risk due to general elections anytime before May next year and the oil shock. In 2009 higher base effect will result in Indian inflation as well as global inflation falling to acceptable levels. A new government will be leading India. There should be interest rate cuts either in the second quarter of 2009 or in the third quarter of 2009 in India which should result in Indian stock markets going berserk once again after June, 2009. One needs to have the patience and remain invested. Had my friend diversified, his investment dilemma would have reduced. Precious metal investing is one of the best forms of diversification.

PLATINUM OCTOBER -- INTRA DAY PIVOT $2055.0

In the short term platinum can fall to $1980 and thereafter target $2100 and $2192 as long as $2038 and $2019 holds

MCX CARBON CREDIT --NOVEMBER (price in Indian Rupees)

Carbon Credit has to hold 1425 to be in bullish zone. Resistance at 1459-1465.

MCXARUN
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