Now for the Short Term.

Three days of US market action will influence the market’s open. Monday was a down day, Tuesday was a big gainer in America, picking up almost 6% gains. Today, wednesday seems to be consolidation.
We can assume that the Nifty will open with a big gap up tomorrow. The Index has resistance at 2700, and, then at 2800.
Should you buy on dip or fade the gap ? The answer depends on your trading style, & the patterns that develop on intra day charts tomorrow.
The Intermediate trend remains down while the Nifty stays below 2950. Thus, any up move should be taken as a sell on rally. Just dont sell blindly. You need a setup (a technical reason to sell), proper stops, then a trigger. (A trigger is a technical event that confirms the selling, i.e. price falls below the previous hour’s low, or closes below support,….)
A setup is a sign of weakness (in this case, when we want to sell on rallies). This could be a double top, a bearish indicator divergence or resistance that holds out.

Time to buy stocks ?

Bloomberg reports : Jeremy Gratham who has been bearish on the stock market for 11 years says: “Typically, those with a lot of cash will miss a very large chunk of the market recovery” because they are paralyzed by fear, Grantham wrote in a March 4 commentary posted today on the Boston-based firm’s Web site. “Remember that you will never catch the low,” wrote Grantham, one of the co-founders of GMO. He expects stocks to return 10 percent to 13 percent after inflation in the next seven years. Grantham told investors to make the shift from cash to stocks in a “few large steps” instead of all at once.

My Notes: For investors, the expectation of a low is enough reason to begin accumulating. I had earlier explained that I purchased Hindalco at 42, with the full understanding that the stock can go down to 30 or even 20 when I will be glad to buy more. (When the price was 170 and charts were terrible, I thought, I will buy at 100. Then around 140, the chart suggested 40. So I waited). Now, such investing can only be done with spare money, sinc the time for frution may be quite long.