Deeper Correction in Dow, Post FED Meeting on 15th Sept & After Effects

I usually do not like to make dramatic statements and for the DJIA which corrected heavily during end of August I had only taken 16,000 as a correction point. If the coming week with the FED meeting approaching, the DJIA close is below 16,000, i believe there would be a sharp sell off again towards 13,820. In short September should be a happening month.

Effect on Sensex: Usually a 1000 point drop on the Dow means a 2000 point drop on Sensex. In all likelihood another sell off could happen targeting 21000 on the Sensex.

Effect on USD/INR: The Indian Rupee would touch 70, which would be the top for all times to come.

Effect on EUR/USD: Euro would move ahead of its previous recent high and target 1.1920.

WTI Crude: I don't expect crude to be a beneficiary of all this chaos created by the Dow however will be able to say next week after FED meeting.

USD/CHF & USD/JPY: I find these both counters very good sells at current levels.

FED Meeting Outcome - 17th June 2015

Consistent with what i have been saying, despite Ms. Janet Yellen indicating that Interest Rates would be hiked one to two times this year, the markets did not react in a dollar positive manner. Usually an interest rate hike makes the currency stronger. An anticipation of a rate hike also makes the currency stronger. This as we can see has not happened in the case of the USD yesterday, rather whole focus is on the Euro. I have been saying that the market has already played the role of a discounting mechanism as far as US interest rate hikes are concerned and will not react to interest rate hikes.

Euro on the other hand is the major focus of the market. Today the Finance Minsters of Europe meet up to decide the fate of Greece. In case there is a default on the part of Greece then this would be the first default on an IMF loan by a first world country. Great Article on this in the telegraph of today...
http://www.telegraph.co.uk/finance/economics/11682277/Greeks-admit-they-will-default-at-the-end-of-the-month-as-central-bank-turns-on-government.html

One must also look at the crosses since yesterdays movements were good on the GBP as well as the YEN. Both moved considerably more then other counters. Gold also reacted well to yesterdays events.

I would look at 1.1180 as a buy in EUR/USD.
GBP/USD still has a long way to go but might take a breather for now.
USD/JPY is a good short.
USD/INR - i expect USD/INR to continue to remain weak. Anywhere above 64.50 can start to short USD/INR which is likely to continue to strengthen throughout out this to the next year.

Will put up charts by the of this week. Waiting for more clearer direction on Crude.