Market Outlook 2710/08

Uncertain market with severe volatility

It was total bloodbath in indian market on friday as it broke strong support of 2850 and went crashing down to break one more significant major support at 2590-which is a worrying part now.On global scenario,The Dow Jones industrial average fell 312.3 to 8,378.95.The Federal Reserve is expected to lower interest rates by at least a half-point to 1 percent this week. But the rate reduction is already priced into the market and unlikely to calm its restlessness.With a recession seen as inevitable, if not already under way, any Fed rate cut would be aimed at cushioning the fallout.U.S governments $700 billion financial bailout package is still not taken positively by the market.World market is seeing bad times.The Fed had moved to the sidelines out of fear that its rate cuts would worsen inflation. Since then the inflation threat has lessened. The threat of a global recession has dampened once surging prices for energy, food and other commodities.Now a few economists are starting to worry about deflation - a widespread and dangerous bout of falling prices -- if the U.S. and world economy get stuck in a long and painful recession.For today in indian market, nifty will face solid resistance around 2600 on upper side and failure to get through this resistance will result in testing of 2520 again and break will create havoc again which will take nifty towards 2400 straight..!! sentiments may be positive only if nifty gets past 2600 with volume and stays above that which will take nifty towards 2680 and then 2740 solid resistance..! one can expect severe volatility due to trading holiday's this week and also due to expiry on thursday.

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