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.
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.
