Forecasting is intelligent guessing provided you have a clear vision of the trend. Each market goes up or down in cycles and in the process a trend is created. I will be fooling myself, as well as all investors, if I say that this is

the level at which the market will bottom or peak out. Most of the time it will be a post-event call. It is MONEY (with a heavy dose of sentiment or hope/despair added to it) that makes what the market is but, one thing I

can say with certainty is that, money has disappeared from most (stock) markets and it is just like the soul leaving the body. There is a big exodus in the money/capital market and investors are now seeking safety of capital in gold & bonds. Anyways,  the market has made a full circle from May 2014 (when the NDA government was installed) and the Nifty and Sensex was at 7,000 & 23,000, respectively. But, having broken 7000 in the Nifty in one fell stroke yesterday (Feb.11, 2016), the market has started looking more ominous to me than ever before.

This is not to scare investors but to caution  not to get exuberant about the market correction in the short term (4-6 months) and venture out to buy or do bottom fishing mesmerized by the price at which the stock quotes. With

the buyers (particularly the big ones like FPI) deserting the market, an "Air Pocket" sort of thing has been created and even a minor selling brings about a big drop in price. The next support level to watch out will be 6,500 in the Nifty and 22,000 in the Sensex (~ 5% correction from hereon),

where I expect most of the poison to be taken out of the system. I expect this level to be reached in about 3-4 months and no surprises if it does before. The aggressive write-off of NPA's by banks goaded by RBI has been

the real cause for an accelerated fall in the bank index and this has dragged the broader index along with it. The worse thing that is waiting to happen is the likelihood of a budget provision to recapitalize PSU banks with Rs.70,000 crores of tax payers money, whereas the simple solution is to denationalize or privatize PSU banks. In any case, as politics will not permit this, it will be one more case of throwing good, scarce money down the drain. Write-off of bad loans is one part of the equation but the other part, recovery of bad loans, is missing. The message is clear: get out of the market whenever it rallies (hopefully post-budget) and postpone buying till a bottom is established. There is still downside risk to the market time-wise and price-wise. It's Caveat Emptor (Buyer Beware) once again.*