BSE Sensex to Touch 17500 in 2 Weeks. Long Term Elliott Wave Count.

My last post on 16th July 2013, after weak upside of 500pts in a week was followed by a drop of 2750 pts. Although i thought that was the lower high (wave red 2) in the Sensex, i found my self squinting while trying to count a one wave down  from May 20th Peak. Although the 2750 points drop justified something major it was followed by a 5 wave spike to 20677. As per the previous post a move above 20,062 invalidated the short term count, but extends the longer term count and it falls so well into place that i dont have to squint anymore. The previous A-B-C is now followed by an X-A-B-C which is a 3-3-3-5.

The call for a touch of 17500 in 2 weeks comes from the fact that if the up move is really over. Then the following down move should take out the previous upmove that started at 17448 completely. The reversal that was created by the FOMC meeting followed by the RBI Repo Rate Rise will be blamed on the new scapegoat Raghuram, however if you look at all markets, outside India, there were reversals on a lot of charts.

The options remain the same as before:

i) Big downside: Green I & II are complete and III, IV, V are pending with downside targets close to 11,000 or below.

ii) Lesser downside: A 5-3-5 correction of the 2009-2010 rally is still in progress which probably will take us down to 14,000

Any move above the 20,457 will make this count unlikely, and break of 21,079 high in November 2010, will invalidate the current long term count.

Indian Rupee Forecast Elliott Wave

I have expected a bearish rupee since the days the rupee was at 45. At that point i was expecting to see the rupee at 63, but thought that would be driven by a crashing stock market. A few months ago with the rupee at 60,  65 seemed like an easy target, but the stock market has barely cracked while bond outflows from the reversal of the hunt for yield, have forced a currency decline all the way to approximately 69. 

The longer term chart shows that we are in a III wave up, while the shorter term chart shows that we are in the process of completing a red iv wave down, possibly already ended or will end somewhere near 63. Wherever that red iv wave ends expect consolidation similar to what we saw in 2009-2011 (1st Half), between that and 69 for the next year, but probably more volatility.. The last decline in the Indian Rupee will be accompanied by a decline in the stock market.