Dow slips

Dow 8374.65 -459.39 (-5.15%)
S&P CNX Nifty 2682.90 -72.20 (-2.62%)

At this point, Dow is trading in the negative territory. I have maintained earlier that the 10-year low of 7591 is a critical level to watch. Looking at the current economic environment, it is only a matter of time before this critical level is breached. Once this level is broken, Dow would enter a long-term bear market. It would be interesting to look at the charts once 7591 is breached. The National Bureau of Economic Research confirmed that the US economy is in recession since December 2007. There is no doubt that the world would take a while to bounce back. However, it’s important to know that every recession lays a strong foundation for the next bull. I would look at 2009 as the year of consolidation and this would probably be the best time to buy once a clear bottom is in place. For now, I would prefer to sit back and watch!

S&P CNX Nifty lost most of its intra-day gains today, signaling the end of the “bull” within the “bear”. As mentioned here , the Nifty did trade with a positive bias and ignored even the worst of news. Technically, I would look at 2654 as a critical level on an intra-day basis. If Nifty breaches this level, then one should short positions to avoid losses. For the immediate term, 2553 continues to be the level to watch. There is no change in my bearish stance maintained earlier.