Market Monitor: Bearish
- As expected it was a wild action. The panic was averted by significant interest rate cut by Fed. However we still had lot of selling and we had 5th consecutive 300 plus day on downside.
- Because there was no high volume capitulation, the muddle continues and there is no clear washout of sellers.
- Bulk of the buying was concentrated in heavily shorted sectors and interest rate sensitive sectors. Any bull move up is not going to be lead by such laggard sectors.
- Any rally here will offer trapped longs another opportunity to reduce their exposure and will be good for putting in new shorts.
- We are now officially in bear market in some indices with 20% plus down move, so any rally is shorting opportunity till proven otherwise.
- The moves will be volatile and capital preservation is number one priority.