You don't need to be a conspiracy theorist to begin to worry about the near-term future. All you need is a heartbeat, a pulse so to speak. The VIX futures over the last 18 months give as clear a picture as any.
After flatlining between 10-20 percent for most of 2019, the COVID spike in March 2020 to 80 percent was knee jerk and justified. Given that the narrative today is of "living with the virus", there has been a predictable decline but VIX has settled above the 10-20 percent "baseline".
Given the fears associated with a "confused verdict" in US elections, I guess this is par for the course but what I fear is that in Oct, the risk perception will grow significantly and allocation of capital will take a wait and see attitude.
Nifty having hit 10800, some of the froth has been taken off, but that's just a test of the long-term average. A bounce after such a brutal sell-off is justified but expectations of a "V" shaped economic revival are not.
Given that concentrated positions have been taken to the cleaners as have the recent movers, some delusional "bottom-fishing" is possible. Metals, autos, FMCG, and tech might look attractive in relative context to their recent highs but the moot point remains, to what extent has the money-induced sugar-high been normalized?
For the moment, my stop remains rooted at 11460 simply because I believe that market men think that only an external event can upset the carefully crafted bull story. I remain skeptical of this assumption, while acknowledging the elephant in the room, the US elections. So much more can go horribly wrong, not least of them is the often misstatement of ground realities and prediction of "return to normal" when it appears that normal cannot be normalized anymore. I could be that worrying Cassandra everyone hates but having seen what we have of 2020, wouldn't you say, "That's justified."?