Facebook: New Bull or Bear Market Rally?

I was just asked yesterday if Facebook was a buy.

Since the September 4th low 17.55 in Facebook, from the daily chart i have been on the watch out for a IV wave up.

From the hourly chart i thought the IV wave was complete on October 24th post the earnings result gap. What followed till the 12th November looked like a 1,2,3, wave. The formation of the 4th wave abruptly ended when it entered 1st wave territory on the 14th. The move hence looks like a abc wave corrective move X, or by an unnatural looking 5 count maybe a V.
Since November 14 what we have is either
i) Bearish: a completed ABC (5-2-5) which completes the ABCXABC which should be followed by some immediate downside, starting with a rapid break of 24 and 22.40
ii) Bullish: 123 of a Ist wave higher, with the 4th wave and 5th wave pending.

The doubt in the bear count stems from the fact that the IV wave as of the 26th November has cut into Ist Wave territory with a move above 25.52 which renders the current long term count on the daily invalid and concludes that a new bull market started on the 4th September and the current move is a 123 of a I of a much larger 3rd wave higher.

So all depends on if the current move morphs into 5 waves or starts reversing heavily after 3 waves.

Hope Bubble Bursting

Is the hope bubble busting??

S&P500 Top Top Top?

Pink lines... shows up at approx 1448-50. Top Top Top?
Do we pop it or do we touch it and drop. I am inclined to short it initially and then see how it goes from there.

BSE Sensex Elliott Wave Count Long Term

The last long term chart post was on October 9th 2011, with the Sensex @ 16232. Since then this level has been crossed approximately 7 times, and this summarizes the market movement for the last 12 months, with the Sensex now approx @ 17700.
The count on the Sensex is however fuzzy as then. In June I also posted "Looking at the Sensex as an FII would" explaining a dollar based proxy for the Sensex to substitute for the Dollex-30 whose data is sporadically quoted, and the count there may help us better determine the direction of the Sensex.

The count on the dollar based proxy based on the INR/USD and Sensex is very clear even down to the subdivided waves. The III wave divides perfectly into 5 waves within the green channel and the larger wave count fits perfectly into the yellow channel. This brings up 2 questions.
1. Is the III wave actually a 1st wave and the V wave a 1of 3 of a much bigger III. (Much bigger implications on the negative side)
2. If the shown count is accurate and the first question is not a viable question (i assume this), then is wave V complete (bullish) or have we just seen wave 1 and 2 of a much larger V(bearish)with 3,4,5 yet to play out. On investigating wave V, and the following move (May 23- Aug 21) i have the following observations.
i. In terms of time the up move following the wave 5 is 1:1 (3 months) +-2days.
ii. The move retraces approximately 50% of wave 5.
iii. The  move does not look impulsive and the waves overlap and very closely resemble a 3-3-5 retracement, with the a wave also breaking up into 3-3-5, which fooled me into thinking the b was a 1st wave and prompting the premature July 29th post.
iv. At a minute level one small upward move 5 of 5 may be pending. 
All observations conclude that this looks more like a 1 and 2 wave of a bigger wave V of which 3,4,5 are yet to come.

Forecast:
Barring a 2.2% move up to 53.90. (approx move to 18000 on the sensex) as per (iv) mentioned above, we should see a start to the downside of sizeable magnitude within the next 2 weeks which should finally take us down at least 25%, in the next few months, meaning that both the rupee will weaken and the Sensex will also fall significantly.

SPY

Maybe time for a "Bull Steak"

BSE Sensex Short Term

The last head and shoulders pattern that i posted approximately a month ago did not work out, it was pretty obvious after the right shoulder got taken out. Its been pretty crazy out there, but i think the market gods finally spoke to me over the weekend.

I have 2 scenarios here:A and B in order of preference.

Just a reminder that the FOMC meetings will run from Tuesday to Wednesday, till the announcement, additionally the Europeans may add some market moving yet insignificant chatter to the mix..

Maybe this time is Different

or maybe not!
Huge Head and shoulders on Franklin Resources Inc. (BEN)
The right time is here. Bigger decisions and larger chop will be prevail at the 84-88 level. If the H&S plays out. This stock could half.

A move back above 116 could be the all clear!

BSE Sensex Short Term

Fuzzy long term count, but on the short term its all very common..

All that Glitters might turn into junk

My last gold post did not take place, as gold just rolled over. No short was initiated.
This current big bounce however provides an opportunity yet again, on something that has taken the last four years to build up.
The chart sums it up. On any push further up around 1655 i will be shorting and will stop shorting at 1675.

I just hope yesterdays pop and drop is not the train leaving the station.

Looking at the Sensex as an FII would.

FII flows consume a lot of analysis and much time is spent trying to figure out what news moves the FII and when and how the flows will move. Surprisingly with all the interest that FIIs generate, a Google search barely pulls up any mention of the "Dollex-30", besides the rare occurrence of it as a benchmark on some dollar denominated offshore fund.
The Dollex-30 quotes which the BSE started in 2001, combines the Sensex with INRUSD fluctuations to very simply display the P/L of an FII investing in India in Dollar terms. In my view this is much more useful in judging FII behavior than looking at levels on the Sensex, especially over longer time frames.
I started watching the Dollex-30 a few months before i started on the blog and have since used it successfully to determine many major turning points in the Sensex. There have been some data issues with the Dollex-30 since November 2010 and so i went ahead and found myself a substitute. As you can see, till the data was published the instruments move pretty much in sync, except for excess volatility during tops and bottoms.

So instead of the Dollex-30, I now use this instrument as a Dollar proxy for the Indian Market.

On the BSE Sensex the 61.8% retracement from the March 2009 lows to the November 2010 highs sits at approximately 12,895, which is quite a way off from the current 16020 level, and corresponds more closely to the 38.2% retracement, and the December lows (15136) are in no mans land between the 38.2% an 50% retracement.
 
At the same time the Dollar proxy made a low in March 2009 @24, high in November 2010 @83.66. The Dec 2011 low made @46 was at the 61.8% level and the last rally that lasted till late February 2012 saw resistance at the 38.2% level (approx 61).  The market is now currently again at this level, and the fibs are working remarkably well with the Dollar proxy chart.

In summary,  from a local view (Sensex) has retraced only approx 40% while the FII's have felt a bigger pinch with the (Dollex-30) retracing 61.8%. Should this 61.8% level break, FII's will begin to get weak at the knees..

S&P 500 Daily

This is a follow up to the previous post  S&P 500 Weekly, that i posted two weeks ago.
From the action in the last two weeks i think a clearer line in the sand can now be defined. A BLUE line that was part of the original post on the weekly chart has been changed to GREEN just for emphasis. It goes through the lows on 3/16, 6/16, the breakdown and retest 8/3, 11/8 before the market collapsed and again in 2012 resistance and then support for the 1st two weeks of Jan after which the market launched higher.

I think if the S&P 500 breaks this line in the next few days, we get a waterfall event like that of August 2011.
For the Elliotticians out there, it looks like a 5th wave is due which will most likely have extensions.

S&P 500 Weekly

My last S&P 500 post on Feb 1st was blown out of the water by a 9pt overnight gap up in the futures and this post carries the same risk, if we make it above 1375 and hold.
On a side note the Emerging Markets and BRIC post that i posted on March 11th, have played along very well and are midway along an intermediate decline..

Onto the chart...
Since the 2009 bottom the S&P 500 has been in a huge blue channel after breaking down from an initial wedge, during the August 2011 bout of selling. Since the October bottom it has tested the underneath of the wedge and pulled back. I think the Bears are shy and now cautious from getting their asses handed to them every time they get their hopes up form the last few dips in November, December, March and April. The bulls on the other hand continue to BTFD as even the major declines of May 2010 and October 2011 have been recovered. From the date on the video it is apparent this has been a theme since November 2010, that has continued to work. The reason for the bull bear discussion is that IMHO nobody (from the twittersphere, except Faber, Prechter and the perma-bears, which are knackered and bloody) expect a 150 pt (Aug 2011 style) immediate drop in the S&P500 to approx 1200- 1125, which would just keep it within the larger blue trend.



In summary i am looking at the current bout of selling in the S&P 500 to intensify and continue to the 1200 ish levels while the emerging markets continue the decline.....

A few days ahead in Gold

In the few days ahead, will be looking to short gold using GLD, somewhere between 166.18 and 166.57.
1:1 symmetry and previous highs exactly at 166.57 to the cent.

Will post a stop when i pull the trigger.

Positive on Emerging Markets??

Lots of $EEM positivity on the stream. But till its gone its still here...
Big H&S. Having trouble clearing the 61.8% of the last move down.

and the big boys doing a lil bit worse..

BSE Sensex Elliott Wave Short Term Count

The BSE Sensex has seen a decline from Feb 22th to Feb 27th. The question is if this decline is a new move down or just a retracement of the move from Dec 20th. The former would mean that more downside is yet to come, while the latter concludes that the BSE Sensex is in a new bull market.

The above chart shows the smaller wave counts. Green A(5waves) and B(2waves) being the bullish count with C(5waves) to follow or Green 1(5waves) and 2(2waves) with  3(5waves) to follow. Since the count cannot distinguish between C or 3rd wave. The only option is to measure the intensity of the wave to distinguish a C from a 3.
1) If A = C, C would terminate at approximately 16859.21 or 16828.33 (S&R).
2) If the decline is rapid and goes past 16000. It is most likely a wave 3.


Trading both possibilities in the short run would mean shorting the open with  a stop at March 2nd highs @17731.88
Posted on Sunday 4th

S&P 500 Parallels

A view on the S&P500 that i will consider as long as we stay under the high made on the 26th Jan at 1333.47
Blue parallel lines on shorter time frame beginning 2011 till August 2011 vs the white on the longer time frame ie. August 2009 to date.

Yes ! I am aware that the futures are up 9.

Posted at 5:45pm IST

BSE Sensex Elliott Wave Short Term Count

Happy New Year. Hope this year is either profitable or educational. Lol...

A quick review.
1. The december 6th post posted with the sensex at 16988 caught another head and shoulders pattern. The post pointed to a toping range of 17000-17200. The next day the market topped at exactly 17003.71.
2. On the 16th December in comments i posted the pattern was formed and was a 1200+ gain from the post. But i didnt instruct a close of the position, to give leeway to further downside and resolution of the pattern.
3. On 4th December i advised a top with a new short at 15863 with a stop at 16000.

So I assume as of today you are either stopped out from 4th december (-140) or still short from 6th dec (+748) or used 6th dec post and the 16th december stop and are (+988)  yeah right dream on..

Moving on
I thought i would do a post back on the 4th while still on holiday, but luckily the market decided to just drag on, so a week later i find my self looking at approximately the same targets and an extended chart pattern, and an upward move that seems to be very close to termination.
I will start the year with a 30 minute chart just to be safe, and follow it up later with something longer term when the short term resolves.

The chart is an (X)-a-b-c of a C retracement wave of larger degree. My target is 16311.58. This whole area between 16200 and 16311 looks like a shorting area. So short at will, the higher the price the better..
Posted on 11th Jan, @ 3:20pm IST with senxex at 16173