Yesterday we saw almost all stock markets in the world selling off. Asia, Europe, US and Emerging Markets, all were down substantially. Russia and Brazil were most nervous ones as they had to be closed for hitting lower circuit! The NSE Nifty and BSE Sensex of India opened gap-down and resumed downward movement for the entire day, showing slim signs of recovery at close. The US Markets including S&P 500, Dow Jones and Nasdaq, all plunged to 7 - 9% down intraday and Dow Jones showed nine handle (9xxx) for the first time after 2004.
Is this significant? Yes it is for sure, very significant. Stocks markets have more less gone back 4-5 years !!! And this happened despite the US govt interfering (mainstream media says its "intervention") with all its might, into the normal activity of markets. This confirms my view that this is basically a Main Trend Bear Market.
All said and done, now what should we expect? Well, to tell the fact, all markets around the globe are in somewhat oversold zones. The Nifty and Sensex of India are into very oversold zones and its somewhat overdone for the time being. I expect a short term bottom near 3600 on Nifty and 11800 on Sensex. There may even be some relief rally. As for US Indices, the intraday recovery was much better and almost half the loss was over before close. The S&P 500, which was down nearly 8% intraday recovered more than 4%.
When I say for short term there can be halt to the down move and even a relief rally, I do not recommend "investing" here. Its only for traders to take advantage of it and in my view the Main Trend is still BEARISH, unless charts prove otherwise.