Has the trend changed?

A roller coaster day for the US markets. Up almost 130 points at one time, they then plunged and took support at the 50EMA and eventually closed 8 points down. This is a very bearish sign. Accordingly we have closed our longs and added a short term short position. The only way to be sure that the trend hasn't changed is for the market to close above the trendline that is marked on the chart.



India:
As we mentioned yesterday, things can move either way. However, given the bleak situation in the US markets, we remain extremely cautious. We share below a chart that was first shown by Vivek Patil that shows the formation of falling channel. We will issue stock specific sell calls in a seperate post. Unless the markets show otherwise, ie, breach of the falling channel, on the upside, at approx 14550 or takes support at 14300, we will assume the worst. We will reenter positions once any of those conditions mentioned are achieved.