So all the confirmations that we were looking for have come.The fall of Dow today by 200 points gives me just the weekness I was looking for.The ugly days of range play and bottoming are over and for NIFTY traders the tape is shouting..short me.We are very close to 2600 and I have this strong feel that it wont offer any strong resistance from here on.
So there a strong bear run and the stocks that look weakest would offer the least resistance.My take is to trade on NIFTY puts and chota NIFTY if you dont have any shorts till now.RIL,looks weak and midcaps will fall the most because most blue chips will start trading at low prices and offer excellent valuations.
So we are once again in a bear run and one thing to remember in a bear run is to remain bearish always.So hold your positions tight till market starts loosing steam and I am looking atleast another 1000 pts fall on DOW before I strt booking profits.Why 1000pts? Well we are in a depression...history repeats and it shows no better than on Wall Street.Obama is doing the same mistakes that American Presidents did in the past.Protectionism,traiffs etc all this will put the economy deep in recession and so can now easily compare the stock market movements during 1929 depression and that of now.
During 1929 the DoW fell by about 89% of its peak..considering the same the markets should touch abot 4800..taking some measures like injection of liquidity we can expect DOW to show some resistance at 5800.Another indicator I am looking at is historical grain prices..but I am still working on that and would keep you updated as soon as I complete..if anybody has historical data regarding wheat prices during 1929-1933 please maile me @email@example.com
So till that time hyappy trading...:)