Trading Range Blues.

Ft.com has this to say on the China recovery miracle:
The laws of economics appear to be suspended for the Chinese — but they are not. They just have “better” accountants — ones that would make Enron’s bean counters seem like dilettantes.
And…
But recently they(commodities) had a serious rebound on the hopes that Chinese economic growth would result in revival of demand for their goods. However, the fictional growth coming out of China is putting that hope to rest. If you own these stocks, you’ve been warned.

Well, that is frank opinion. At least for the past few days, the Chinese markets have also agreed to this viewpoint, falling 17.5%.

Compared to China, India may be a bubble
The Shanghai Index peaked out at 6124. It now trades at 2870. The Index is standing at 46.8% of the all time high. The Nifty had its all time high at 6357, now closed at 4387, is standing at 69.01% of the all time highs – much better Shanghai. Of course, such analysis may be too simplistic, but it does appear that the Nifty may be in for a sharp decline if world markets continue to fall.

But the main point is that the Nifty continues to be in a trading range. Such ranges will see alternate bouts of optimism and pessimism. When price are moving from support to resistance, things seems fine. When they begin moving back to support, a lot of pessimism comes in. While the Nifty remains inside this range, the market movement will alo appear volatile as the Index gets pushed between support and resistance. The big move will come when there is a range breakout.