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 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.

BSE Sensex Elliott Wave Count H&S

On August 5th i wrote about the head and shoulder pattern in the BSE Sensex. This pattern broke down soon after and a measured move from the breakdown would be 13000 ish . A natural progression of this pattern is also a test of the neckline after a breakdown from underneath. A textbook definition of this chart pattern can be found here. I waited for that test all of September but the closest it came was approx 17,250 on the 8th and 21st of September. The Friday close of 17,804 tested and closed perfectly on the neckline. In my post on October 9th the 2nd option which was short term bullish also talks about the head and shoulder neckline retest with a final target of 17800.
The chart below shows that this has been achieved.

Elliott Wave Count.
As per the 2nd option on the October 9th post, we revert to the September 11th Count. The move from the 15th of July to the 26th August is a red (1) and as expected the Red (2) has expanded and finally completed on the 28th October with the neckline retest discussed above. Red (1) and Red (2) currently seem like the first 2 waves of a 5 wave pattern, to the downside.  


This time i think there are no two options, just one.
DOWN
I think in the next 2-3 weeks we will be back at or below 15750.

S&P500 Musings

Below is a comparison of the spy in 2008 and now. The topping pattern came in the form of 3 peaks in 2008. The third peak shaped like a scissor blade followed by a decline, a slightly lower decline and then a 16 pt rally. The current top is similarly shaped with the latter half of the pattern seemingly more volatile. Totally surprising? Maybe not! Although the currently rally has come at an extraordinary pace (2.5 months vs 1 month), in form it looks just like the 2008 rally.

Fibonacci Observations.
The March rally in 2008 was barely a 61.8% retracement of the decline of that time. But if compared to the decline from the 2011 May highs (29.75pts) it is very close to 61.8% (18.39 as on 24th October) versus the 2008 retracement (16.15pts).
Of course, with the EFSF gimmicks the Oct 24th high is long gone, but we can now look to the 76.4% retracement level @130.16 which is not too far above, and should be tough resistance.

BSE Sensex Elliott Wave Count Long Term

Well, its about time for another post!!
My last post on September had 2 Scenarios. The Market went with option 2 on the first move down to 16400 and managed to hold above 16200. My target for the A-B-C was 17600 which would have been a test of the neckline of the head and shoulder pattern. The market was was weaker than i had assumed. Since i had expected the A-B-C to break through the 11th Feb low, i had counted the low on the 26th of august as a sub-division Red(1). But since the ABC did not break the 11th Feb low (17295.62) i can now count the 26th Aug Low as a Green(3). This means the count changes and the september 21st high is a Green(4), instead of a Red(2).
The new count is below and the old count from the last post is here. I will not attempt to label the short term subdivision right now but will do that in later short term posts, as the market starts moving.


Starting with the higher probability of the 2 Scenarios:
1. We shall start a decline immediately.
My target for this decline is the a measured move from the mini head and shoulders pattern (white box, 11th Feb 2011 - 4th Aug 2011) is (14,450-14,750).

2. If we go over 16750, the Green(4) is most likely not complete and will extend further into the 11th Feb (17299.25 territory) and a final target of 17800 may be reached. In short we would revert to the 11th September count with a slightly raised target due to a slanting head and shoulder neckline.

BSE Sensex Elliott Wave Count Long Term

The picture says it all. We are in red wave III of which green wave (1) and (2) are complete. Green wave (3) has begun and completed its first subdivision red wave (1). Red wave (2) may be complete as of the 8th of September or that may be just be a bigger A-B-C which might actually take us upto 17600 and properly test the neck line of the head and shoulders pattern. A measured move from the neckline test would leave us at approx 13,200.
2 Scenarios:
1. If the market breaks below 16200 most probably red wave (3) has started.
2. If there is some kind of chop or indecision at 16200 we might be forming an A-B-C which should take us upto 17,600. and then we should see the big drop.

BSE Sensex Elliott Wave Count H&S

I will post a long term Elliott wave count chart when it becomes clear and after the chop is done with. In the meanwhile, i would like to draw your attention to the weekly chart of the BSE Sensex where a massive head and shoulders formation is almost complete. Todays candle is not yet shown but the market closed at about 17305.87 which is almost at the neckline. Either up or down we will soon find out.

BSE Sensex Elliott Wave Count Short Term July 26

I decided that this needed to be posted before the open.
The last post on July 14th called for a top at 18,824. That target was missed by 24 pts.
Although the market did fall, it did not completely go to hell, instead it traced out another extended X wave followed by another A-B-C which ends the counter trend rally, which the chart below demonstrates.
For the ending of C i had a few targets in mind.
Typical A=C (18986)
76.4% retracement (18941.65)
Yesterdays top of 18932.27 is below these levels by just a few points and the 5 wave structure on a 1 minute chart of the market from the top into the close seems to indicate that the top is finally in.

Translation for dummies:
1. Top is in market may open at 18900 but should sell off immediately today.
2. By the end of the week we should be way below 18660 and possibly even below 18400.
3. Any move above 19000 will void the current count and i will post the next alternative.

BSE Sensex Elliott Wave Count Short Term

Bombay has experienced 3-4 bomb blasts last evening. Thought the market would fall??
The blasts dont seem to have shaken the wave counts for the Sensex. As seen from the count below the sensex started a 5 wave pattern which was completed on Tuesday 12th. Today's rally is part of a C wave will probably take us upto 18824 which is a 61.8% retracement of the leg down that started last Friday morning.


The next down move should start after the completion of wave C, then the news outlets can blame the FII's for selling.
As i post this the market is currently at 18746.44.
FYI: My long term count highly relies on this short term move playing out.

BSE Sensex Elliott Wave Count

My previous post evaluated 2 short term scenarios for the Sensex.

As of Friday the 1st scenario has played its self out without the major retracement. In the post i had suggested a final target between (19000-19200). The Market opened and reached an intraday high of 19131.70, which satisfies my target and also a 5 wave structure, which has been marked in the above 5 Day chart. 5 wave structures are predominant in both waves 3 and 5.

Now on to the longer term chart, which is the updated version of the chart initially posted on June 5th.

The short term 5 waves up in the short term chart, completes a (C) counter-trend wave, which is the final retracement wave of the down move that spans the 14th of April to 25th May. This means that a new move down has started since Friday mornings highs, and should initially take us straight down to 17500 or lower.

Summary.
1. Target 17500 or lower. (Blue Box)
2. If 19131.70 is broken to the upside the longer term count and all targets will have to be reevaluated.

BSE Sensex Elliott Wave Count

Just a quick update on short term count of the Sensex.
The big question here is whether the top on July 1st the end of a 3rd wave or the end of a 5th wave.
1. If it was the end of the 3rd wave then the Sensex has a little higher to go probably (19,000-19,200) after a brief pullback probably to the overnight gap up from June 29th (18,506-18,598). And then finally all the way down through the Feb and June lows.
or
2. If it was the end of the 5th wave then the Sensex goes lower and breaks all the way through the Feb and June lows.

I give the first scenario an edge based on smaller counts which could be debated.

Summary
Short term traders could monitor the (19,000-19,200)levels to see if they hold.
Long term buy and hold can start selling immediately.

BSE Sensex Elliott Wave Count

This post could have been labeled the "2 Week Senseless Sensex Guide." Expect a lot of volatility and a post from me every week.

The chart below is an updated chart of the chart i first posted on April 17, 2011. We missed the 17750 target by only 36 points.


The market has completed 5 waves down from the 14th of April to the 25th of May and is currently retracing the down move. As part of that retracement, we already got one up move and I now expect a move down to 18072-17786 by possibly 7th June or 8th June and then finally an up move whose targets i shall determine once we complete that down move this week.

GLD Throwover??

Gold from a short perspective looks interesting both on a short and long term chart with similar patterns on the 30 minute and the weekly chart.

The 30 minute broke the rising wedge upper trendline and then crashed below it after retracing approximately 76.4% of the down move from 2nd of May to the 5th of May .

The weekly chart also has potential to look like a throw over if we have a couple of down weeks, that ultimately break the bottom trend line.
This might be the start of a major sell off in gold.
Intermediate Target on GLD 146.00

BSE Sensex Elliott Wave Count

While the longer term takes some time to work its self out, i decided to post a 30 Minute and a 2 minute chart.
While the 2 minute chart already completed a five wave pattern down, this does not seem large enough in points or in time to be a wave V. Most probably this is the 1st wave of the larger wave V. As seen in the 2 minute chart this 1st wave might have already completed a retracement at 18547.01 or may have another small leg up tomorrow, followed up by an immediate failure to maintain any breakout.

Conclusion:
Within 2 days we should see lower prices, with a move down ending in the 17750 area

BSE Sensex Elliott Wave Count

A few days of price action changes a whole bunch of things, but for now the overall trend remains down. Everything here is in comparison to my previous post dated March 22, 2011 available here.
What i considered was a completed wave III, may actually be wave (1) of a much bigger III.
What i considered was a completed wave IV, may actually be a (ABC) retracement of (1), followed by an (X) and another (ABC) which i think completed on Wednesday 13th with the 400+ pt move to 19737, which is a few points short of 76.4 %retracement of wave (1). This C leg does seem incredibly short but i give more weight to the time chart which seems indicate an inflection point on the 13th, as also indicated in my previous post.
Conclusion for Dummies:
1. For now i think we go down to 18250. If this holds, this could mean that the second (ABC) has not yet completed.
2. Break of 17750 confirms todays count, and would put us in wave (3) of III a.k.a (Mama Bear)
3. If we get above 20750, egg on my face.

and yeah ill be..

BSE Sensex Elliott Wave Count

In Elliott terms the BSE Sensex seems to be forming an elliott 5 wave pattern down with distinct fibonacci time relationships. The Wave III has subdivided into 5 waves.

Time Relationships
Wave I= .5 * Wave II (+/-1 day)
Wave IV= .5*Wave III

Price Relationships.
Wave III = 161.8 *Wave I

Forecast
Using Wave I as a benchmark, Wave V would look to end between 17295 and 16620 or at 16000 (which is a nice round number and previous support) around the 7-14th of April which would be a tradeable buying opportunity.
Look for dying momentum to the downside, to pick a intermediate bottom.

Disclaimer: As with all TA, the better it looks the more likely to fail.