Don’t be in Denial, Be Smarter!

I came across a post in this subreddit by a person who asked when the market is going to be bearish. So, I explained in a comment whatever I can about how market dynamics work, and I thought it would be a good topic to share my thoughts on. Something that is post worthy.

Me personally, I don’t think Indian Market is going to go into a bearish mode soon unless there’s some bad governance, global recession, war affecting the market, and so forth. You can look up the macro-economic factors affecting the market.

As I always tell, India is a growing economy and growth would be rapid in a growing economy.

What makes something bullish or bearish is its market structure. Higher highs and Higher lows would mean a bullish market, and vice versa.

So, if you were to look up NIFTY’s 1-minute, and 5-minute charts you’d definitely see a bullish/bearish trend over there.

I think in the long run however, Indian Market is bullish. We are doing pretty well as an economy if I am not wrong.

Corrections are inevitable though. That’s the way the market works. Remember I mentioned higher highs and higher lows? Higher lows are formed after corrections. Makes sense?

It’s not healthy for any market to keep having up moves only. At one point or the other it is bound to have a correction. If you look at lower timeframe charts then, you will see a bearish trend.

Think about it. There are always going to be buyers and sellers in the market. You’d be a fool to tell otherwise and obviously at one point of time sellers are going to dominate the buyers when they book their profits.

That’s the moment when the market starts correcting itself and retracing a little bit to fill all the pending orders created by the imbalances until the point where the buyers be more dominant again, and break the previous higher high.

Hope you got the logic. Its how demand and supply works.

Market hasn’t had a proper correction for a while now, and its part of the game so sooner or later you cant just deny the fact that it’s going to go retrace a little bit atleast.

Look up concepts like Market structure, Wyckoff schematics (Accumulation and Distribution), Demand and Supply, Order Flow, Liquidity, and so forth. You will understand the logic better.