What is a Bear Market? This question is crazy after we have seen our market almost double in three months. Well, Russia is having one, right now. Bloomberg.com reports that Russian stocks have fallen 20% from their highs, starting a bear market, the first one among important indices since March 2009.
With a high made at 4700 approx in the Nifty, we will also have a bear move if the Nifty trades below 4700 - 940 = 3760. I think it may trade below this level, but I would not call it a bear market, just as I do not think that we are in a bull market - it is an uptrend.
I am looking at 4200 as the dividing line for a dip or a deep correction. My charts suggest a lot of support around this level. If the Nifty breaks below this support, I have to accept that much lower levels are possible.
For me, the actionable ideas that emerge from this analysis are:
I will not plan any investment buying. Buying is no longer on dips. Buy on panic declines ( a little) and after signs of a base (will take time).
Long only Swing trades should be avoided since momentum is no longer in favor of bulls.
Sell Calls on rallies in Nifty , actively traded stocks.
Day trades can be on both sides, avoiding selling after one down day, avoiding buying after one up day.
Now we know it: The Boom that we saw was not the result of intelligent policy making - It was -Good Luck . This is what probability is about. Sometimes it works against you, sometimes in your favor. The boom was a set of circumstances that worked in our favor. If you want to find more, read the link.