Market giving jitters

Markets have an amazing way of punishing short term speculators and going against the consensus opinion. Throughout the last one year, market in general, carried a net short position on the benchmark indices. Put call analysis were always pointing out to an extremely cautious approach being adopted by the market participants. After the somewhat disappointing Q1 results, short positions and call writing saw an incremental addition as the market participants turned pessimistic . Just when nearly all the bulls had given up on the prospects of the market breaking the range anytime soon and nearly all the portfolios were hedged by purchase of puts or high liquidity levels, markets surprised everyone by shooting past the trading range in September and having a shy at the all time high in a matter of weeks. Bears were trapped and short covering helped the markets in sustaining higher levels. Then came the rather impressive Q2 results which justified fully the confidence markets had in the robust growth prospects of our corporate sector. Retail investors who had so far stayed away from the markets started coming back and the mid cap side of the market, the segment usually fancied by small investors saw some very smart moves. The consensus opinion on the streets turned decisively positive. Before the confidence in the markets could translate into good participation from domestic investors, the popular perception on the strength of this bull run appears to have been misplaced yet again. Though the long term trend is likely to remain positive expect panic to get more accentuated in the coming weeks. Investors should look out for bargain picks on the way down. Traders are advised to use any pull back to create short positions.