When the last bear turns a Bull - Sell!!

When the last bear turns a Bull - Sell!!!

Just a few days back, all experts on TV channels and financial websites were screaming that this rally does not have the steam to go on and on like this. Today, its a different story. Now, after breaching the 200 DMA, everyone feels that this rally may continue till 4000-4300 on Nifty!!

Reminds me of the time when Nifty was hovering around 2600 levels. I was watching the TV channels even then and the Experts were talking of 2200-1800 on Nifty. I put a message on moneycontrol at that time that this looks fishy and went long near 2600 to be highly rewarded. Now, the exact opposite is happening.

So what to o now? Nothing. Technicals have not been working in this market. Did they work when Nifty rallied till 3500 without any meaningful correction. Did they work when Dow closed below 7500 and still recovered and breached that level. Most of the technicals tell you what happened in the markets. The predictive technicals tells you what is going to happen based on statistics and history. They work most of the time because there are so many people following it. But this time it is different.

This market can be traded more with common sense than with technicals. They say the markets lead the economy by six months. That implies that all the world's problems are going to end by this October. Do your calculations. For e.g., unemployement rate in US is still on the rise. Companies are cutting jobs to stay profitable in India. If people dont have jobs with regualr incomes, how do you expect to build the demand that will drive growth and get us out of the woods.

To cut the story short, the breaching of 200 DMA does not hold much significance in such a scenario. We may have seen the worst of this recession, but we are still far away from a Bull Market.

Long term investors should stay away from this market till the picture becomes more clear. Short term traders on the long side - ride your luck but get out the first day Nifty closes in red as you do not know how far it can go.

For Shorters - Well, Wait for the Last Bear to Turn Bull :-)

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