A Hindu folktale tells of three blind men encountering an elephant. "It's a tree," says one, stroking a leg. "No, no, it's a snake," says another, feeling the trunk. "No, this must be a house," insists a third, spreading his arms against the bulk of the elephant's body.
All three had a different perception of the elephant based on the part they examined, and all three conclusions were wrong. The elephant was larger and more complex than any of the men realized.
A similar tale is told everyday in the market. Each market participant has different needs, agendas, histories, perceptions, and sees the market completely differently. As with the three blind men examining the elephant:
The Bear saw Friday's drop as a great vindication of his view and recovery of his position.
The Bull saw the action as a short pullback to add to or enter a long position.
The Day Trader saw the morning gap up as a great short set up, and the long saw the gap as a great exit from Wednesday's trade.
This is one of the challenges of our market debates; each one of us has a different perspective from which we are examining the same elephant. Each of us has a reason to interpret what we see and say to influence others or convince ourselves that we are right. No one is right or wrong but human nature is subjective, and thus leads to the creation of the market whereby both buyer and seller feel that they've been enriched
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For short term, expecting the Nifty to be bearish to test the 5700 to 5540 levels.
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