Having reached levels of support, the indices are moving sideways. Last 5 sessions all have similar lows. So, there is buying at the lower levels. The selling (FII or otherwise) has not been able to dent that. Similar situation in Bank Nifty. Similar in Nse500.
Now, this tells us two things. One, that the market is not so willing to go down. Two, the market needs some positive feed for going up.

We then have to wait for that trigger to arrive so as to turn more active on long side. Alongside, we need to maintain a stoploss below the recent lows.

Yesterday movement began near a pivot level and built its way higher to finish well. But the move was slow and overlapped in the intra day charts and did not pullback to the minimum levels required to make us feel more comfortable. Hence, we have to wait for more show of strength before committing to the long side.

Rate cut expectations go up a tad in the US but in India expected to remain status quo. Seasonality indicates that August is generally not a good month for Wall Street and if that were to play out this year too, then overseas feeds will remain negative.

Reports in the papers today showing that money flow into Small and Mid cap funds continues but valuations are now a question mark (31x for Mid and 34x for small). So, even if the market revives from the lower levels, it may be more focused on large caps (Nifty at 21x valuation as of now). Or, putting it another way, investing into small and midcap would now demand a longer timeframe expectation for rewards.

So astute stock picking and adroit risk management would be the key for creating any alpha on portfolios. Not easy.

FII index shorts at 1.57L contracts. If some trigger shows up to produce short covering, that would be the fastest factor for a big rally. Else, the dull moves can continue and index trading may prove to be listless. Until then, stick with stock trading