BOOM!

Well got the big selloff...Morning started with a 1-1.5% down and I used this area to get rid of almost all my longs and also shorted 3100 Nifty. 

6.66% down...When I got up today and saw this on the screen, I thought to myself...Man thats not a good omen!...Hmmnn...let us see...

So what next? Some bouncing about in a range is possible before we head a bit lower. But remember this is all part of the bottoming process and I also think we are finishing the last 5th wave of C. Today 2860-2850 needs to hold for some kind of rally to develop. If not, well God help the bulls. I will probably cover shorts today and just wait it out....Not going long here because of the uncertainty...Will again try to go short higher...But lets see that as we go along.

See this post I made some time back -

http://theindianmarketblog.blogspot.com/2008/11/rapidly-approaching-strong-confluence.html

We are still playing out this scenario...I am looking for one more major low in the next few weeks. Maybe December.

Updated Daily Chart for your study.

Best.

Are we done?

Is the rally over? Or close to over? For some time I am having this nagging thought in the back of my mind. The earlier decline held to the 38.2% retrace at 2860 and bounced back nicely. But now it could face very strong resistance to the upmove at around this 3180-3250 area. If it breaks out of this, there could be another quick 200 point upmove. But somehow I dont think we will break out above 3250 also very easily. 

Now, even though I said what I have said above, we still can have more rallies and I am open to that possibility. But let it be. We can afford miss out on the last 10% of the rally as long we get out safely...Retest of the lows is quite possible from here...There are some other important things here but I will talk more about that in next post. 

So, I am going to sell my cash longs today on any rally pops and maybe build some small shorts. Its not a good day to do this because there might not be a big rally today but I will see what rallies I can get so I can sell into it...

Charts to follow later.

Best.