Why this is still not a Bull Market

This rally cannot be termed as the start of a bull market. In my interactions with fund managers and people of repute in the financial world, people were just waiting to see when the Nifty stops falling to get into the market with the huge cash they were sitting on. Nobody likes to catch a falling knife (on the upside OR the downside). 2500 held out on a lot of occasions and may have given a lot of people some hope.

Next, people are now waiting to decide on a range on Nifty. This range has to be determined as an elongated period of consolidation has to happen in the markets. At top of the range, you will find the buyer volumes decreasing and then only there will be some correction to lower levels. The levels that we hold on to on the lower side (after testing 3-4 times) should confirm the medium term bottom where again you will see buyer volumes increasing. One can safely expect this range to hold for 2009 at least.

The only thing that is being confirmed right now is that we have now stopped falling. Next step is to confirm the range before the next bull run starts. They stay bottoms in the markets are made in Panic. I think that panic has already been created in October and from now on, we will only have higher bottoms and higher tops.