You can't tell aman.

That's where large funds have some issues but these guys use hedging strategies such as options and futures to maintain capital during times of crisis and even they sometimes cannot completely be spared the market. You simply cannot beat it.

This is where small investors like us have an advantage. We should be able to monitor things regularly without much hassle as our positions are smaller and we can get in and out of positions relatively quickly than these large funds, provided u have liquid stocks.

Recessions are most properly defined as when "GDP declines for 2 or more quarters". So the stock market may have these kinds of corrections even though the GDP output is still positive and increasing. However, due to transparency of economic figures, the stock market usually factors those economic effects very quickly and is usually reflected in the price as is the case nowadays:

1. the subprime crisis has impact on GDP

2. war on iraq

Now I'm not an economist but how much an index will fall is always hard to tell. The index does not fall all the way till the end of a recessionary period. The market factors that in right away. And looking at current levels, I think if the S&P 500 breaks the 1400 level even further, we're in for a surprise.

SO HOLD ON!!!!