Dip or Bear Market ?

One day after exhilaration comes despair. The Nifty fell 80+ points after the US markets had rallied overnight. So, what’s going on ? yesterday, this column was talking about 3200, maybe 4000. What should be the view today ?

We assume that today’s market decline is just a correction in an up move, rather than the start of a new bear trend. Why ?
With the market moving in one direction – up, over the past week, it was not really a surprise to see a day of large down move. First, we are in a bear market so declines should come easily. Second, the market was quite ‘overbought’ – with a negative divergence visible in the RSI.
Today’s high at 3073 also has some significance. Assuming that the Nifty does not go above this number tomorrow, the 3073 level will become a pivot high. Then, a reaffirmation of the up move will require the Nifty to close above 3073. A close below 2950 will confirm a short term down move.

The Public is Missing:
I am thinking most of the current activity is from institutional investors; the public is still “not even looking” at their brokerage accounts. Most will enter at the top of this rally, at which point we should be getting out ?