BSE Sensex Elliott Wave Short Term Count

My last post on Feb 3rd pointed to the Jan 28th Top at 29786. The Market in its infinite wisdom finally topped within the same expanding triangle on March 4th at 30,024.
This has now been followed by an ABC down and an abc up.

The abc has met with resistance from a midway channel line as you can see from the daily above and the weekly below.

What is not known is if the correction up (abc) is complete. Either way a pull back is due.
1. If the abc is part of a bigger A up we first get a pullback to form B and then another C up.
2. If abc is complete and the market breaks below 24500 the abc can be labeled X of a WXY with Y in progress and a target of approx 22,000.
  
I lean towards the second probability.

BSE Sensex Elliott Wave Long Term Count Extension+ Extension

My earlier post edited for further extensions.

My last post, stated a condition "This count rests on the condition that the last high that we put in on Sept 22 at 27,254 stays intact, so this short term condition controls the longer term outlook." The market has spoken and we did break 27,254 with 5 small waves up and new high now at 28,822 on November 28th. We have again extended with another 5 waves up in an expanding triangle that ended on 29786 on Jan 28th. This now in hindsight can be counted as the final 5th wave of the impulse i thought had ended on September 22nd and again on November 28th. Any new 5 wave moves above the 28822 29786 high will invalidate the count. The new count is below.

The current juncture also coincides with the trend channel from the 2008 low.

A closer view of the final count is below.

  The outlook remains the same: an ABC down to the 21k-22k area.

BSE Sensex Elliott Wave Long Term Count Extension

My last post, stated a condition "This count rests on the condition that the last high that we put in on Sept 22 at 27,254 stays intact, so this short term condition controls the longer term outlook." The market has spoken and we did break 27,254 with 5 small waves up and new high now at 28,822 on November 28th. This now in hindsight can be counted as the final 5th wave of the impulse i thought had ended on September 22nd. Any new 5 wave moves above the 28822 high will invalidate the count. The new count is below.



The outlook remains the same: an ABC down to the 21k-22k area and then a final up ABC move into the 30k-35k area to complete a wave V within a contracting triangle (which i shall display when the market is ripe for a major move down).

Side Note: While on holiday in India I stumbled on this FII Net Inflow Chart in one of the local Newspapers. What is interesting to note is that that last highest inflow was in 2010 and 2011 turned out to be an approximate -23% year. With record high Net FII Inflows will 2015 turn out to be another lousy year?? I think so!

BSE Sensex Elliott Wave Long Term Count

I thought of posting my Long Term counts last week but EWI announced free week which started on Wednesday and then i thought it would just be redundant when the worlds favorite EW source releases the same information. So i finally got a chance to view their their Asian forecast charts and specifically that of the Sensex. How wrong i was......
The difference in the long term counts is significant. Their long term charts are very bullish while mine are very bearish. So while the mainstream presents a bullish chart i will give you the bearish alternate. This count rests on the condition that the last high that we put in on Sept 22 at 27,254 stays intact, so this short term condition controls the longer term outlook.

The market has just hit the long term trend channel, which makes me think there will be a pullback. The question is: Is it going to be significant?? All bullish counts have a 1st wave label for the November 2010 top and a 2nd wave ending at the December 2011 bottom. That makes the line in the sand the 21,079 level. I think this level will be broken within a year. If that is the case, then the count will revert to my bearish count presented above. Short term moves will clarify the current picture.

In summary i am looking for an ABC down to the 20k-21k area and then a final up ABC move into the 30k-35k area to complete a wave contracting triangle wave V.

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. 

BSE Sensex short term Elliott Wave

The last post on March 24th showed a head and shoulders pattern. The neckline was breached on 4th April and the test of the neckline seems complete as of today. This post will put that pattern into the context of a wave count. 

Although the market topped at 20203 on Jan 29th in terms of the wave count the market topped on March 11th. As from the chart the market has completed waves I & II and is in the process of forming a wave III down of which 1 & 2 of minor degree also seem complete. A breach of 18175 will confirm that a 3rd wave of III down has indeed started.
In conjunction with the head and shoulders post what we should see here is a move down to 17450-17000.
The count will be invalidated if another up move breaches the 19025 level.

BSE Sensex Short Term Elliott Wave

I was a  bit early in calling a top at 20156 on the 21st of Jan. The top was actually put in on the 29th of Jan, at 20183. For reference to the Longer Term Elliott Count you can refer to my post dated Jan 22, 2013. The current drop starting on the 29th follows a picture perfect elliot wave pattern with each of the waves breaking down perfectly into smaller waves.

As per the count we have started a 3rd wave of which i &ii are complete. The wave (i) is also complete but completion of (ii) is debatable since we have a zig zag abc that might also form the "a" wave of a bigger flat which might finally conclude the (ii) at approx 19,000.
3 possibliities.
1. The whole count is wrong if we break 19200.
2. If 19,000 is breached, (iii) has yet to start.
3. If 18,760 is breached (iii) has started which should take us down to 18250 ish.

Updates to follow in the comments as moves are made.

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.

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..

BSE Sensex Short Term

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

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..

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

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





 

BSE Sensex Elliott Wave Short Term Count H&S

As per an alternate count todays move to 17000 could be another short term top. But at the risk of another termination count getting blown out of the water by coordinated central planner illusions, i decided not to post a count. Instead i post something easier to comprehend. An old school Head and Shoulder formation on the daily chart that is in the process of forming a right shoulder. You can revert to the October 31st post for an explanation of the pattern.
Between the count into today and the H&S pattern that leaves a topping range of 17,000-17,200. I expect this to be tough resistance.

Posted on Dec 7th at 2:00pm IST with Sensex approximately @16988
As usual realtime updates in the comments section.

BSE Sensex Elliott Wave Short Term Count

Even though this is a short term count, the implications are long term, since this is a short term rally in a downward market.
My last count on October 31st was able to catch a 2000+ pt move in the Sensex. A full break up of this count is below in the first chart.

The second chart is the retracement stage of this move. The retracement count is picture perfect A-B-C-X-A-B-C which i think is almost complete with only a 3rd, 4th and 5th wave of the C pending, and I think will end approximately with the sensex @ 16200. From there we have 2 options

1.) We rapidly break the lows on the 23rd of November @ 15478

2.) The retracement is not complete. The caveat here is that retracements are harder to count and the current move that i have counted as A-B-C-X-A-B-C is part of a much bigger retracement. So that means we get a short term bottom @15478 ish  and then we might go above 16200.

Either way there is a short term top in the 16200 area which can become either a longterm top or a short term top.
Posted on Nov 28th at 2:20pm IST with Sensex@ 16085.90 
As usual realtime updates in the comments section.