Resign of RBI Governor and Election Result in 5 States tomorrow - Better to sit out
This is not the right time to be in the market.
I am not trading and not even watching any data right now as it is irrelevant given the political uncertainty which cannot be figured out by some form of technical or fundamental analysis. Events have to play its course for clarity.
Election result will be a mirror for BJP government and market participants are waiting to take a clue from it on what kind of result we may have in 2019. Also, we will have panic rally and counter rally's so it won't be surprising if market goes sideways with high volatility giving whipsaws to all sides again and again.
To top that, RBI governor Urjit Patel resigned and SGX Nifty is already down by 200 points. It is going to be catastrophic tomorrow and there will be a lot of volatility. I am even considering to wait till coming Monday to take any position. Since the position has gone vacant, any filling of the position by government, date for which is unknown and sudden decision will again cause an uncertainty. If the candidate is good then we might shoot up, if not then we may tank.
Also, it gives Congress ammo to pin BJP on meddling in independent institutions.
Trade war between China-US is also escalating.
On 14 December, we have a meeting between RBI and Government, which is again cause for uncertainity.
Given this uncertainty, we are going to have a lot of gapup and gapdowns. I personally do not want to sleep with this kind of unnecessary tension where money will be at constant risk.
Update 12:25 pm- Do not get into this trap that market has recovered. Results are not clear and commentary of meeting on 14 December is not near. Post result, rally might be in a different way. Stay away.