Sensex/Nifty are poised just at the crucial resistance 9400/2850 which is more likely to be crossed over easily amid positive sentiment from all around besides reduction in fuel price. If there is a close above these levels then it would imply that the markets would not fall sharply in very near term. But at the same time things would remain under pressure until sensex/nifty remain below 9800/2970. Until then the bears would keep initiating shorts for the short term.

We are in a bear market and it would be prudent to keep a bias more towards downside than upside until some crucial levels on the upside are decisively breached. This bear market is likely to remain here for some time more and no bailouts should lure people into buying recklessly. There is lot of homework to be done to evaluate current earnings with a view that there could be more deterioration in next couple of quarters or more. All the top economists are saying that economy has yet to bottom out and there is more pain in the offing around the world. Read BBC report from Davos.