The crash that we saw from 12,400 to 7,500 is possibly the first leg of a longer term correction, says the market expert at Cashthechaos.com.There is a big rally which is playing out which refuses to really die down in a hurry. What are your thoughts on the way the markets are doing?Yes, the markets are refusing to cool off. On every parameter that I track, it is over stretched at the current moment and are hitting very important resistant levels. At around 11,225, there are multiple resistances for the market. So if the markets do not respond to that resistance and do not come down, we might even have a little more extra push or some sort of a spike up to 11,600. That is where the next resistance zone comes in. But as a step of caution, you need to be holding trailing stop losses. If you are long, this is not a market you want to play the last stretch. It is okay to let go in this current leg. If the market is as strong as it is posing at the moment, you will have pullbacks and those pullbacks will give you better opportunity to lower risks. So as things stand, if the markets do not respond to the resistance of about 11,225-11,250, we might have a spike up to 11,600 but be careful in playing it. The global market is also stretched. The emerging markets are having a great run because of the dollar weakness and dollar to Euro positioning is also against one of the five-six year accesses that we have seen. So once again, maintain caution there. The market cannot keep pushing higher but you do not want to be taking the risks that are disproportionate to your risk profile.Which of the areas are looking weak but are rallying and hence become the best opportunity for short candidates? There is a 40% rally we are sitting on as far as the index is concerned. In certain stocks, it is much higher. Which are the good short candidates in your view?Basically a short in a strong market comes with its own double-edged sword. So you have to be very careful. But at this juncture, you want to look at stocks that have run up a lot. If you look at the Bajaj twins, they are overly stretched. They need a correction and weaker players barring Escorts, the autos have been quite weak. Escorts is one of the strongest ones in auto space; leave that aside but that is still outperforming. So when the correction sets in and that idea that will come in, that correction is setting in, only Nifty tries to break below 10,880. Until that point, you do not want to short the market. So with that parameter in mind, you can look at these stocks that I just mentioned. And you can also look at one or two select banks. If you look at something like SBI, it has been hovering under Rs 200 for several weeks now. Do not look at one or two banks but we have a pre-condition that the broader Nifty needs to correct and drop below 10,880. Until that happens, you do not want to look at creating shorts.You also look at longer term charts. If one were to take a look at what is happening in the Indian markets in the last three years after hitting really 12,000 on the record highs, there were big bruises all the way till we went to almost 7,500 on the Nifty in March. There was a terrible crash in October too. What is the structure telling you now? Where are we building towards 12 months far out?That is a very important question and there are two possibilities at the moment. The crash that we saw from 12,400 to 7,500 is possibly the first leg of a longer term correction and hence the current rally that we have is a corrective bounce. But it can go all the way closer to the all-time high but not break the all-time high. That is one option. The other option is the markets have actually had a very swift large degree correction at the 7,511 low that we saw in March and they are in a bull market. So that resolution which path the market is going to take over the next 12 months is going to come through when the markets pull back for this leg of the move from June lows of about 9,500. The character of that pull back will tell us more about which route we need to choose. At the moment, I am agnostic to what the markets are going to do but I am keeping my options open.