The worst is yet to come...Markets on the verge of a major fall.

As a first indicator, CNX Nifty Junior Index has entered into a major correction phase.

Similar is the case with S&P CNX 500, S&P CNX Defty. This is just the beginning of a major bear phase in the Indian markets, the possibility of which looms large. Fridays rally can be grossly misleading.  All other  Indices like Nifty, Bank Nifty and others are on verge of a major down trend. Most people wont believe this, but I see a major down trend which may last longer than most people are imagining now.

Nifty PE view -

Nifty PE made a high of 25.91 on 13 Oct 2010 and now almost a year after that, Nifty PE is kissing 17. It is still in the no trade zone. One must remember what happened in 2008. History repeats itself. I see a similar situation in the offing. The correction that lies ahead looks not only deep, but also very long. One must hold all temptations to buy in the market hoping that the correction is over.

Global Scenario -

The situation in Europe and the US is well known. The hope that since most world markets are in bad shape, money will flow to Emerging Markets, especially India and China, may turn out to be a farce in the near term. I see Indian markets going in tandem with most world markets. I fear that the worst is yet to come from the Euro zone.

Nifty view -

Fridays rally in our markets can be grossly misleading. Do not conclude this as the end of correction and start buying. The charts are showing a contradictory. I do not think Nifty would close above 4950/4970. It has immediate resistance @  4935/4950/5000. On lower side, 4800 and 4720 remain the sole strong support. Thereafter, the slide can be fearful and fast. Immediate future may show Nifty levels of  4695/4635/4550/4450.

For traders only short positions are recommended with a stop loss 5050 on closing basis.