The pessimists are out of the woodwork and saying “I-told-you-so". Never mind the fact that these losers on the sidelines missed out on a lifetime’s opportunity to help themselves to bundles of free money. As for the bears, they were skinned off much earlier. The question then remains if anybody is making money off this current massacre in the market.

A common factor for most major market indices is that all of them are now trading well below their 200 day-moving- average and those who swear by their charts and algorithms will distinctly switch sides. Many of the present day traders and ‘investors’ must be quite unnerved as their memory of the last five years is a market that has only been stimulated up. And accompanied by grandstanding, they have only conveniently lulled themselves into believing that India is an island of prosperity which can withstand a global headwind. The shock must be palpable and the gainers list on the NSE made for a quite a spectacle as there were no gainers either in the Nifty or Junior Nifty, the screen looked ghost white as 49 of the Nifty components took a bath. The only Nifty stock that held on Black Monday was NMDC.

This sequence of events in the current month is eerily similar to what transpired in August 2007 when BNP Paribas first stopped redemption at three of its investment funds due to “complete evaporation of liquidity.” Markets all over the world swooned and then came the Fed to the rescue pushing up markets including ours, to an all-time high before things started unraveling in January 2008.

While the Fed had ammo then, this time status quo should do. Hence, the only disconnect in this fall has been the USD behavior against the Euro. Despite the carnage across the board and the flight to safety to US Treasuries, the USD has been losing ground against the Euro. If this trend persists, it can be safely assumed that the currency market is expecting the Fed to stay put on its rate hike dilemma. That status quo will fuel a rebound.

Those with cash must be licking their chops and would want the carnage to have a longer shelf life. But a steep market plunge tends to be followed by a sharp rally and we will get to see our fair share in the next few trading sessions. However, bond king, Jeffrey Gundlach whose firm DoubleLine manages $76 billion is convinced that there is more mayhem in store. “You don't correct all of this in three days," Reuters quoted him yesterday.