I have to admit that I underestimated the abilities of the good doctor. Out of the various moves available to him, he chose the one move that the market could have reacted positively to. He chose to do nothing indicating that he believes that the recovery is on schedule and that no quantitative easing is required for the moment. Asia has opened up too buoyed by the sentiment in the US.                                                                               

How great it would be if the markets could continue to be buoyed up because some other market reacted positively. This way we could all move up in some kind of virtuous cycle. It would also be so much easier for the TV commentators. Why did Asia move up... because US closed strongly. Why was Europe strong? ...taking a cue from Asia and then finally in the evening US moves up because of strength in Europe and Asia which leads us the next day for a strong opening in Asia. If only all investors could be made to see reason and behave in this manner, we would never have to see a down day in the markets at all.                                                                              

After a long time, I looked at the fundamentals of the market. It does look cheap since Nifty is trading close to 14 times historical earnings. But who is to say that it cannot be cheaper? However my belief is that for that to happen we might need to see some more deterioration in fundamentals in Europe---or some creepy data crawling out. Else the market could go up and trigger my short covering levels. I continue to remain short for the moment. I will cut my short positions if Nifty crosses 4974.