SENSEX is going to close the week below 9000 mark. It is a signal that we are not only going to breach the previous lows but also make new lows up to 6000 levels in weeks to come. We may get rebounds from time to time. In other words, we remain at lower levels for a little longer time and rallies would be faced with formidable resistances at 10000, 11000 and then 13000.

The woes of the U.S. auto industries are not over and that has taken a toll on the U.S. markets finally. S&P 500 has closed below its October 2002 levels confirming prolonged recessionary period ahead for the U.S. Technically, this is an indication that smart money would remain out of the markets and markets may remian at lower levels for a much longer time with unsuccessful rallies intermittently.

World economic scenario is getting worst day by day. There could be some serious trade imbalances that causes sharp depreciation in some currencies w.r.t USD. This could add to the woes of slowing growth and rising unemployment in developed economies. India is treading very carefully and has negligible impact of subprime tsunami but worldwide credit crunch could dry up foreign investments in months to come. China could be the final winner as it has huge USD reserves.

LONG TERM INVESTORS MAY START PICKING THEIR WELL RESEARCHED STOCKS IN THIS DOWNFALL. DO NOT INVEST DURING THE RALLIES FROM CURRENT LEVELS.