We see a bearish engulfing candle today signifying a likely peak to the recent upswing. The market hit a high of 3235.24 in the morning and tumbled all the way back to 3177.55 at its close. The 3180 mark seems to be a temporary support for now while the momentary peak seems to be close to 3250, as I have predicted.
Looking at the charts today, in particular the after trading hours trend, I would expect the market to continue in a very short-term downward path. As I have mentioned, this is likely to be a second-wave upswing. This upswing is not without perturbations and corrections. The major fall would likely hit close to the 3000 point support in the short term.
Since November 2007, international markets have been closely correlated. Today's phenomenon marked a strong deviation from this close correlation. As one interesting news article suggests "every day, traders start their guessing game". Today it seems, traders here have made their own mind, in either taking profit or going short, sparking a selling frenzy.
The reason why I do not think this bear market is going to persist is because the current trends suggest good upside and in the worse case, a range market. In these cases, buying will come back when the market feels that stocks have become cheaper or when short positions need to be covered. However, in the former case, the upward trend will take a longer time when buyers are more conservative in their increments than they are at liquidating their holdings at whatever gives a good profit.
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