All the markets around the world jolt heavily due to a conflict between President Donald Trump and North Korean leader Kim Jong-un. But, we all have faith to get back into the market as soon as this dust settles.
Mr. trump has many reasons to calm the market & market may be rebound for short term, but Kim Jong-un does not have any reason to bow down. This issue will again emerge on time to time basis. But It may not be the biggest worry for this ailing stock market, there are few others.
The market may be rebound in a very short term as the global relief, but will it sustain? let’s see both side arguments!!!

Market is set for rebound !! but don’t count on much!!

All the markets around the world jolt heavily due to a conflict between President Donald Trump and North Korean leader Kim Jong-un. But, we all have faith to get back into the market as soon as this dust settles.
Mr. trump has many reasons to calm the market & market may be rebound for short term, but Kim Jong-un does not have any reason to bow down. This issue will again emerge on time to time basis. But It may not be the biggest worry for this ailing stock market, there are few others.
The market may be rebound in a very short term as the global relief, but will it sustain? let’s see both side arguments!!!
Why do I think Market will be rebound in short term(Very short term)?
1. Global sell off is the best opportunity to enter, historically.
Any global sell-off is best opportunity to buy in Goldilocks Indian growth story. One is getting best available stock at a discount to week earlier price. Indian investors are just waiting for same, they will going to infuse the money from next week, once relief sing is there in the global market.
2. A fund manager will infuse fund on this real correction of this Bull market.
All fund manager. Yes, all fund manager has been sitting on around 10% of their portfolio in cash. Indian MF’s fund managers are next big catalyst to drive this short term really. Indian fund manager tends to invest even at this correction on a high level as they invest for Long term, so Any short term correction is a boon for them considering 5-year horizon from now.But mind well, They will not be hurry to buy, they only buy when they fill confident about this global dust to settle.
Rebound is set to happen, But will it sustain for Near term??
1.Margin calls
Mostly for traders, when a market is good &  keeps on climbing up, Broker will provide much more margin to trader to buys heavily. This process in bull market is bound to set new records on index levels. But, as in when the market is on a rough ride, the margin will be cut for a trader, they buy less, thus bulls trend has been compromised. It will lead to a snowball effect and as the market started going down, then less and less managing available to a trader. this cause bigger problem, once down trend is established.
2. Valuation
Again, the market is on such high valuation, where Value investor still not find any comfort to invest the Big chunk of money which lays on their portfolio. There might be few Individual stock opportunity for the Value investor, but certainly not for broad market like nifty.Even recent result of many blupchip companies have been dismal which make valuation much more expensive in P/E terms.
Even FII, who mostly drive the market, has reduced their future trading exposure from 87% Long position to 61%.
In nutshell, Market may be rebound next week once the dust settles due to portfolio buying by the fund manager.But on an upper level, it will again face resistance due to valuation, bad result & traders refrain from margin trading.
Let us know, which side you are betting next week?
Tactical Venture
(SEBI registered adviser)