QUANT SYSTEM TRADE RECOMMENDATION - 21.03.23

From the desk of Capt.D.Ganesh Raja DATE: 21.03.23

Hello friends,

There is a series of negative news flows coming from triggered by collapse of Silicon Valley Bank, Signature Bank and First Republic Bank and this has potential to snowball into a big banking crisis in US. This coupled with Credit Suisse crisis makes dark clouds loom in the horizon reminiscent of the 2008 financial crisis.

A bailout package has been patched by former Federal Reserve Chairman Janet Yellen and CEO of JP Morgan, Jamie Dimon, where it is said that some of the large US banks would be taking deposits from customers and smaller firms. Also some of the behemoths would also be contributing their own money to avert a widening crisis. US Government has been very swift to contain this. As per news sources some 11 banks have agreed to chip in.

Some senators are very critical on this kind of arrangement, where some of the top executives in the failed banks have sold their stake prior to the collapse and why they should not be punished. There is lot of news material available, in case you are interested to read more about this.

UBS Group AG, Switzerland’s largest banking group has agreed to buy Credit Suisse for nearly USD 3.25 billion.

So for now this gives an impression that the crisis has been stalled, but what lies beneath is anybody’s guess.

The surprising part for me is that, in spite of all these negative news , system has again given buy signal in Nasdaq Composite at 11675.54 on 20.03.23 and I have gone long on it in the international trading competition through Fidelity Nasdaq Composite Index ETF, as of today. One can stay long on this with a stop loss at 11400 and leverage of 0.3, target 12938.

Indian equity markets continue to be in doldrums and for now there is no clear signal. Readers might recollect that ever since system exit has been generated on 25.11.22, we have been in sidelines. One can point out that why system hasn’t captured this fall till 17000 levels but that is the way it is. The 10 year GS index is steadily moving up and also VIX is stabilizing, which increases the chances of markets arresting the fall, however further confirmation is required.

GOLD: Last close (MCX) – 58730.0. International gp;d prices have moved by about 5% in past one month. Gold had a stellar move in past few days but weekly charts are indicating there is going to be consolidation for sometime now to digest the gains, before aiming for fresh up moves. All I would say is to just stay put in Gold.

USD – INR: No change in views since last recommendation. There is a discussion in banking circles that rupee might lose more value against the dollar in 2023, which is contrary to what I see, so it would be interesting to see what happens.RETURNS TILL DATE SINCE 04.07.20 : 75.9% (AS OF TUESDAY 21.01.23 CLOSING)

LEVERAGE: 2.2

TRADE RECOMMENDATION LOG.pdf

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