Friday, October 16, 2009

Diwali 2008 vs Diwali 2009

What a change in sentiment between Diwali 2008 and Diwali 2009.

Diwali 2008 everyone was morose and convinced the bear market is here to stay. It also coincided with the best time to enter the market and would have given 100% returns in 12 months

Diwali 2009 - everyone is happy and bullish. People's PMS and Mutual fund investments arecoming back to positive (basically 0% return over 4 years but people are still relived to have no losses). The last few bears are turning bullish.

Conclusion - be careful. We might be entering the last leg of the bull rally

When I say might it is because as a trader we have to be open to both possibilities. that is the beauty of stop losses.

Currently I am long in the Nifty and riding the rally. How do we know the market has turned bearish and time to go short? The market will tell us - and I will let you know. Just keep watching this space.

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