Nifty remains in a down trend & U.S. Markets confirm Major Tops

Peter Brandt, says in his post here, the NYSE composite Index as well as the Russell 2000 have confirmed bearish head and shoulder patterns.
Please read his post for full details. I am giving below the chart for the NYSE composite taken from his blog post.

I turned bearish when the Nifty broke below 5300. A pattern target for the decline was given at 5050. Since then, the Nifty has touched 5050, and fallen more, currently trading at 4900.

The trend is down. Traders MUST trade with the trend. The bigger picture for the Nifty remains difficult for the bulls. The up move from 4500 to 5630 had a 61.8% retracement at 4950. That support has broken down. Once we see a trend retracing by more than 61.8%, doubts arise if the retracement is a pullback or it is a new move.

So far, the downside momentum is strong. Except for one day, the day to day trading has been dominated by sellers. I will not call them bears because we do not know if the sellers were exiting or creating short positions. But, they have been selling.

How will the down trend end? The Nifty will find support, then chop around the support level, then test the support. After a successful test, the markets will begin to rally on some days. This will create bullish reversal patterns. All of this will take time. And, remember, it has not even started.

Can the Nifty fall to 4500 or even 4000?

Well, yes. This is a market. Anything can happen here. I am not looking at downside targets, as of now. Just following the momentum, which remains down.

Have Fun!