New Delhi, June 15 -- Dear reader,

Last week, I wrote about the average retail trader getting into overdrive and raising his stakes in the markets. That is a sure-shot indication of higher greed levels. The market-wide position limits (MWPL) and margin trading facility (MTF) data suggest the retail trader has been stepping up his borrowing to buy stocks. This was pointed out in my last week's column here.

I have also warned you time and again that rising retail exposure elevates the risks of a "crowded exit." As unexpected adversity hits the markets, retail traders (the weakest of all segments among players) surrender their positions en masse.

Last week, we saw some signs of that capitulation. The role of Israel's attack on Iran cannot...