The bears have covered considerable ground in the first trading week of the new year. Indian markets are clearly the worst performer amongst its global peers. The grizzlies have managed to plough into the gains of the past 3 weeks and handed in a loss of 3.75% for the Nifty and 4% for the Sensex.
An important development has been in the price action of copper - an ominous dark cloud cover formation (If you are a P&F chartist, a high pole warning). Although a follow through sell off week is needed here before conclusions can be drawn about the extent of the damage, copper is deemed to have a doctoral degree due to its ability to pinpoint key market turns. Hence, this chart remains the key market to focus this week to gauge the health of the global equity indices.
Yet another market where bears have made serious inroads last week has been in the precious metals space. While Gold's stumble around the $1425 level for the third time may be obvious to many, Silver the key out performer in this printed run to prosperity, has logged some substantial loss. A reversal signal on weekly charts, a "bearish engulfing" pattern is a high probable indication that the run here is coming to an end at least for the intermediate term, if not for the longer term.