Over the last couple of months its been purely a technical play in the markets. Therefore, in spite of massive bail out packages and huge stimulus plans, the markets are just being dictated by technical factors. No one is willing to take risk beyond 33% to 50% rise from the troughs because almost all the markets have breached their crucial trend lines and supports, technically.

But now, for the investors, it would be too much of a wait. BSE SENSEX is in an area where long term picks could have started in strong counters and every fall from current levels should be an opportunity for 3 to 5years investment. Invest in a staggered manner.

For short term traders, the important levels are 8000 and 6000 on the SENSEX. A sustainable trough is anticipated in an area between these two levels. But be cautious about sideways movement at lower levels. Trade light lest you need to keep rolling over your F&O positions. January earnings season is awaited anxiously and there could be some more disappointing surprises all over the world as consumers are not spending much.

Today's economic data of U.S. could evoke some sharp reaction on either side in the DOW.
U.K.'s GDP numbers are also due today. Although, the FTSE is in an uptrend, there is inherent weakness in this market and any negative news could pull it down towards its previous lows once again.

To sum it up, no stimulus packages are going to help unless economic data and earnings start giving positive signals. So, we are going to remain in a prolonged bear market with intermittent rallies including panic falls.

The levels and outlook given in the previous posts below are still relevant. Trade accordingly.