Round two........ go to Reliance Bears?

Despite yesterday's strong pull-back, the Sensex today opened with a negative gap of 134 points at 13,531 owing to weak cues from the global markets. Fresh selling pressure in the markets forced the index drop to a low of 12,935. Some buying in late trades saw the index recover a bit, but eventually end with a loss of 571 points at 13,094. The BSE Realty index plunged over 9% to 4,295, and the Metal index shed 8.5% at 12,114. The market breadth was fairly negative - out of 2,684 stocks traded, 1,875 declined and 750 advanced today. The Nifty dropped 168 points to settle at 3,926.

Was it expected? Not really - atleast the kind of drop we saw today. I was dumb struck - I talked to one of a trader and the word around was that if the market gaps down - it is likely to recover during the day, on the other hand if it gaps up there may be strong selling pressure. What happened is in front of us but why it happened - atleast I will be honest - I do not know. I went to dozen sites to look for possible explanation but that eludes me still. It also happens one of those rare days when TRIN said bullish but the market crashed. The StochRSI too is moving from overbought to oversold in two bloody session and the market does not follow it still. I would love if someone can make anything out of these technicals for whatever they are worth and tell me. Because I can't.

Okay to the commingday now. Europe ended green and US - DOW was up .65%, S&P 500 up .11% but Nasdaq down .27%. Asia - Nikkei is down but not much at .11% and Strait times in green .38%. The charts today are all mixed up like rubbish. One indication is saying oversold the other is near the overbought line. Anyway I will list out the indications for all they are worth. The Nifty candles made tweezers the closing daybefore being just two points short of the opening yesterday. RSI trying to go back to oversold region below 30 marker, Slow Stochastic redline is still above the blue and is above 20 marker and many would have bought into this indication. StochRSI that had gone from zero to just short of being overbought has turned down is just above the 50 marker now. MACD indication remain bearish with the redline below the blue and divergence increasing. The line from May 2nd to day before's low has a retractment (38.2%) at 4400. will we ever reach there? Lets just wait and see.

As I finish and push the publish button - Nikkei is trying to recover and will hopefully be in green by the time we open and will give us some courage to go up.