Just a bit of Random thoughts on the market !
In the last 2 months or say last 4 months markets have come back to almost Oct 2009 levels which is like pushing back the index by 15-16 months.
So all the gain which was seen over the last 12-18 months has been washed of the index and if in between the volatility was so high that losses have added up due to wrong timing or wrong stock picking.
Majority of the investments of a trader/investor is mainly towards midcap and small cap stocks.
I wont consider the Sensex as a measurement of Market moves in terms of broader market but Sensex is back to 18k-18.5k which is down 13-15 % from peak. Broader Market Indices like BSE 500 down 17% frm peak, Small Cap Index down 30%.
If someone would have had allocations to real estate or Infra the wounds could be deeper! then one can digest. For example Punj Lloyd is below 2009 lows.
In the last 1-2 years though Index has moved up back to 21000 the move was not secular like we had in 2007.So there have been certain stocks which ran away and certain which just crashed.
So the wound is deeper then it seems !!
The major concern now is whether the fall is over it has much more steam and may hurt more? Well technically speaking there is one more down wave left in the best case scenario. Either markets take a dip below 17300 and make a bottom or 16100/16800 or does a retest of 17300.
It would be surprising if markets were to turnaround from this point and cross 19200/19600 levels in a hurry.
Any fall below 17300 will obviously lead to a new low in broader indices. With many stocks down 40-50% from peak without a major fundamental change the next dip if it comes would seriously be an interesting time for investors !
Times could be tough over the next few months. One may see another 5-8% dent below the last low in portfolios or indices in the worst case!!. But after that is over we may well be set on a smooth journey.
Be ready to bear the pain over next few months. Be patient and dont be foolhardy or look for big trades let the markets settle.Once this period of uncertainty is over Investors/Traders will get their chances for some of the biggest opportunities like 2009 ! did.
Nothing is permanent !!
The above thoughts are purely random with no technical or fundamental view:) but a possible scenario is March end could be the time to get ready!