Conviction is a strange thing, it tests you, your determination, your homework, your skill, how individual you are and how patient you are wearing the fool's crown. It does one more thing, it makes you extremely individual, probably alone (when you are right), screaming sell at a top and buy at a bottom. But then markets are strange beings, the top is followed by another top and bottom by another low. The line between conviction and foolishness becoming blurred every time the prices move against you.

Against all odds, we continue to believe, selling in such times is like ‘selling a trough’. It is poor risk management, to sell the prototypical bottomless pit. Every pit has a bottom. And the 10 year bottom of Dow is 6% away. If you think that makes you rich, you are fooling yourself. After falling for nearly 12 months with extremely oversold momentums, S&P 500 hitting an underperformance low against DOW, markets moving into positive annual seasonality, oscillators mildly over-reactive, it’s too late to sell on fundamentals or technicals anyway.

Just to be sure that we can continue to hold our positive call across the globe for a while more, we inverted the Dow charts. We really don’t see a collapse of Dow below 7,500. It’s an ending five, accompanied by failing momentums. Above that, we are still above October lows on India, Romania, Russia, China, Brazil, and Japan. Even if we are wrong, and markets do indeed push more than 10% lower from here, we rather wait for this collapse than SELL NOW.

Last time we looked at S&P vs. Dow cyclicality. This time we had a look at BSE 500 vs. Sensex (India). And we see the same thing yet again. The broad market is turning up against the blue chips. Our positive call stands negated below Dow 7,500.