Market may see a fall or will be flat

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European markets enjoyed a good rally, but US stocks finished mixed - with the Dow up and the Nasdaq composite down. The Dow crossed 12,000 for the first time ever, but closed well below that mark. Asian markets are down this morning, and the global short-term trend is down after the brief European rally. This could lead to a fall here, or at best a flat market.

The market went down on Wednesday, with the Sensex losing 25.35 points (0.20%) at 12,858.48, and the Nifty falling 4.35 points (0.12%) to 3,710.65. The CNX Midcap went up 18.80 points (0.40%) to 4,757.80. The largest negative contributions to the Sensex came from Bajaj Auto (29.4 points), HDFC (14.2), HDFC Bank (13.4), Reliance (11.5), Wipro (9.3), Tata Steel (5.4), Grasim (5.4) and Tata Motors (5.2). The biggest positive contributions to the Sensex came from ICICI Bank (29.0 points), Reliance Comm (11.8), Bharti Airtel (8.2), ITC (7.8), Hindalco (6.6), Larsen & Toubro (6.5), Ranbaxy Labs (6.2) and State Bank (5.2).
 
The market's breadth was neutral, with declines outnumbering advances 1.09 times on the BSE, and 1.09 times on the NSE. The volume in advancing issues was 63.5% (45.5%) on the BSE, and 61.4% (49.0%) on the NSE, while that in declining ones was 36.2% (50.2%) on the BSE, and 33.2% (50.1%) on the NSE.
 
The number of Hotline stocks at 200-day highs fell from 11 to 10, while the number at 200-day lows remained zero. The number at 5-day highs went up from 52 to 59, while the number of at 5-day lows rose from 75 to 84. The 240 stocks averaged a gain of 0.37%.
 
The main indices opened little changed, and then swung both ways without any clear direction inside a band for the rest of the session. The CNX Midcap improved immediately after the start, and then remained choppy for the rest of the day.
 
All the indices remain in the intermediate uptrend that started on July 24. The levels below which a downtrend will be signalled remain 12,179 for the Sensex, 3,509 for the Nifty, and 4,719 for the CNX Midcap index.
 
Most global markets are in intermediate uptrends and a comfortable distance above their downtrend triggers.
 
The market's long term (major) trend is up, with the Sensex, Nifty and the CNX Midcap all with rising intermediate tops and bottoms. In other words, this is a bull market once again.
 
This means that the bear market from the Sensex's May 11 top of 12,671 lasted barely six weeks, bottoming out on June 14 at 8,799. Yet, the 31% drop in the Sensex was in keeping with previous bear markets - although those bear phases had lasted considerably longer.
 
Most global markets are also in major uptrends now, some after short-lived bear phases similar to the one we went through.
 
A closing below the last intermediate bottom of 9,875 will end this bull market, while a mild downtrend would suggest that the bull market may be a reasonably persistent one.
 
More than half the Hotline stocks are back in major uptrends now. There was no change in the major trend of any of the Hotline stocks yesterday.
 
The FIIs bought USD 8.4 million of stocks on Tuesday, while the MFs dumped USD 2.6 million worth. The FIIs are currently averaging daily purchases of USD 141.8 million over the last five sessions, and the MFs are buying at an average rate of USD 3.3 million.
 
All the major global indices are still in intermediate uptrends. Most are in major uptrends, too.
 
The Dow rose 42.66 points (0.36%) to 11,992.68, while the NASDAQ composite went down 7.80 points (0.33%) to 2,337.15.