There is a lot of panic in the market whether a bottom has been made or not. This is difficult to answer but

lower levels may be tested as momentum is on downside. One have to wait for some time before confirming it.

Using Fibonacci levels we may say that the bull market that began in September 2001 @ 2594 to a high of 21206 in January 2008 a 50% retracement is placed at 11900 which is already broken. Now the second retracement of 61.8% is placed at 9703 which may also be tested in the days to come if Sensex fails to close above 11900 successively.

Bottom cannot be confirmed on the day it is made. A rally from the bottom confirms it. Subsequent corrections leave a room for more downfall. Retracement more than 61.8% confrim the non formation of a bottom. Even after a bottom is in place we may not see a V-shaped recovery. Ideally some time should be spent in a narrow range in order to consolidate and form a base for the next rally. For all this to happen and to confirm a bottom time of a few month may be taken by the market.

Although if 9720 is also broken than the low of 8799 made in 2004 may be last support for the sensex.

Since Many support levels are broken market looks down and very very weak.

The short term outlook is quite weak. Traders may initiate shorts by identifying sell opportunities. Many stop loss may be violated in such kind of market. Gap down opening is making situation worse for day traders. Risky traders can make a lot of money in this market.

There is sale in the equity market where buyer is getting huge discount of upto 90% on the most favourite stock of the yesteryear. Many stocks are at attractive valuation. Lower level in the range of 9700 and 8800 can be used to accumulate in a staggered manner but only good quality scrips. Despite good valuations people are avoiding good scrips and chasing craps where there is no valuation at all in any manner.

Traders should avoid bottom fishing and trade with the trend.