16k it is!

Its sweet sixteen baby! The sensex today crossed the 16000 mark and went stronger into the day to close at an all time high of over 16200 after an intra- day trading of almost 600 points. The question now remains, however, just how long is the saccharine gonna retain its sweetness.
The market has seen volatile trading for a long time now and the rally over the last 7 and a half weeks which led to the 1000 pt increase was charachterised by as much. A 20 % change in the index from the opening mark, which leads to a close to the day’s trading means as much as 3000+ pts change at the 15000+ level. Below the 20% level, there is no mechanism to check volatility and given the latest predominant bullish trend in the market and its increasing tendency to react sharply to even minor developments in the national and global markets, this development was long overdue. In fact, the 53 days that the last 1000 points leading to the 16 K mark took seem like an inordinately prolonged period for such a run.
However, it shall not come as a surprise to many if the sensex touches the 17000 mark within the week. Given the recent speculation about the central bank announcing a cut in the bank rate, for market experts across the country and around the globe are of the opinion that there is an increasing credit crunch in the country and that the rates have been high for a very long time, and especially in the light of the fed bank rate cut of 50 basis pts announced yesterday, even decent trading of about 200 to 300 pts up at the end of the day should do the trick. Also, expected to contribute to this bullish run are the dark horse stocks, those that did not participate in the run up to the 16k mark and are trading lower than their usual trading levels, but are fundamentally good stocks, even expected to grow better.
Despite the volatility, the asian economies are growing fundamentally stronger by the day, even as the fed bank in its statement expressed concerns about the direction in which the American economy is heading. Experts throughout the world vouch for the fact that its in asia today where all the big money is. However, what degree of correlation can be attributed to the incredible rise in the sensex and nifty vis a vis the growth factor will become clear in the following weeks.
Meanwhile the age old investment advice holds even more promise today- invest in fundamentally sound companies and do not get carried away by volatile and sharp market sentiments. For in the long run, one may expect the front runner stocks of this rally to get cheaper because a correction in the market is long overdue and such high volatility in the markets at such high rates will be hard to sustain. Quick money, however, is on the cards for the smart and agile players.
Till then, its sexy sixteen!