The Mad Mad World of Market Meltdowns

Don't know if I've mentioned this before, but I work in a stock brokerage firm that is a member of both the National and the Bombay Stock Exchange. Thus in addition to the regular monday morning blues, i also suffer the occasional "Black Monday"...Today was a double whammy, a monday and a very volatile "Black" monday... A perfectly rotten and evil day that saw markets collapse like a ballerina on an oil slick... The BSE had its largest intra day fall ever - in absolute points that is..... at one point in time we were a good 1700 odd points down... i really feel for those poor bulls stuck in long leveraged positions... your's is not a happy plight... the reasons for the crash... well they are many and varied. one gem was that the government was going to fall. another was that George Bush had proposed a growth plan that involved in some nebulous way, distributing $145 billion to the american tax payers. according to someone's calculation that worked out to $800 per tax payer.... either he doesn't know what things cost or he's mixed up the calculations of the american standard of living with that of somalia.... what the heck is a measley $800 going to do for someone with thousands in debt???? the difference as stephen roach succintly puts it, is this, during the tech boom and subsequent bust, tech contributed 12% to the US GDP. The housing industry on the contrary contributes a very hefty 72% to US GDP.... China's consumption is at $1 trillion v/s $9.5 trillion for the americans... Indian is almost no where at $650 bn... i agree with Mr. Roach when he says that no emerging market is going to be able to step into a breach caused by a slow down in US spending... but will $800 do it? i doubt it...
now the question on everyone's mind is .... when will this end? the bears (yours truly included) expected a correction... we even expected the market to come down to 18000 levels... well its done that.... so now what? do we rise like the phoenix or sink like the Titanic? i have a nasty feeling there's still a bit of sink left.... remember there need to be a few margin calls for today's trades... and the retail investors are still panicking.... the last time this happened was in 2006 when the commodity markets fell. today instead of the commodity markets its the us market, but the repercussions are very very similar. that time we sank close to 50% from 14000 odd to 8900.... so does that mean that this time round we will be seeing an index of 11000? i sincerely hope not....
my advice... stay in the large cap space... avoid all tips and so called multi-baggers like the plague, and buy on every fall.... that is in the last one hour of trading. chances are that we'll bounce back to 21000 by the time the budget is announced....