I was lucky to have watched the opening bell on TV, 30 seconds into trade and halt. What a reaction I must say. There is a lot more to this reaction than just a strong sentiment driven rally, which is the main concern of this article.

Immediately after the rally, we had analysts from mutual fund houses and security brokerages, and god knows what random places beaming with optimism, expecting levels of 16000 etc. One fellow even went to say that he expected the Nifty to reach new highs, quickly added a note of caution that the time-frame could be long.

“What lies ahead??” screamed the anchor; we had images of the bull on the Wall Street in the background.

What I seek to ask, is the media trying to create a sentiment here, and force out a bull run for any reason or is there a greater conspiracy? Conspiracy theories apart, the media was going gung ho about the election verdict and also the stock market. Looking at the reaction I think the pressure on the government is unparalleled in the recent years. And the eagerly awaited 100-day action plan will turn out to be damp squib.

Not because nothing has been achieved but because way too much was being expected. Yes, the possibility of the government change in the next elections five years down the line seems very much a reality because of the expectations that are so high, no matter what is achieved it will be viewed as too less.

The market reaction was nothing short of madness, for heavens sake it is just a government that has been elected, government of the people, by the people for the people. They are no wizards or magicians who will wish away all the macro and micro economic problems.

On the expectation of the bull market beginning, breakaway gaps are often a common sight at the beginning of a rally. But most technicians would agree that such breakaways should be accompanied by the volumes. This Golden Monday somehow missed the crowd; paper thin volume makes the numbers look like statistical glitches. Further such gaps which are formed out of low volumes often get filled than otherwise. So unless the market remains up, supported by increased volumes for the week and also for the month without filling the gap or even seeking to fill the gap, it would be dumb to expect the bulls to take charge.