Friday, August 5, 2011
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.
Thursday, August 4, 2011
SPY Elliott Wave Count
Over the last few months quite a few counts have been discarded. Somewhere in June i charted this as an alternate count and realised that this would have plenty of leeway to frustrate the most market participants.
As an overview, the whole pattern is a 5-3-5 zigzag marked with a white A-B-C.
Commonly counted is the first part.
It starts the white A wave with the march lows and counts 5 red waves ending at April 26th 2010.
The white B wave ends on July 1 2010.
The white C wave is where the confusion lies.
It starts on July 1 2010 and breaks up into 5 red waves.
Red wave III further sub-divides into 3 yellow waves.
The most complex part is the yellow 4 wave which is a flat 3-3-5 (yellow A-B-C).
Yellow wave 5 subdivides into 5 waves that are apparent on shorter term charts and ends on 8th July 2011 . This yellow 5 wave is truncated as it barely breaches yellow wave 3 to the upside. This also completes red wave III.
The big picture says we are currently in a red wave IV with one red wave V to go which would complete white wave C and the entire move up.
The question now is: How low can red wave IV go?
We know that it cant go below 112.60 cause that would be the breach of red wave I.
If we draw fibs (green dotted) from the start of wave white wave C to its current high at yellow wave B we have 2 targets within range 50% @ 119 and 61.8@ 114.60.
Now looking for clues in structure on the 30minute chart.
The red wave IV started on the 6thof July and is tracing out a green a-b-c.
If green c were to end at 119, that would make a = c*261.8% and would also coincide with the above discussed 50% retracement.
Then there is symmetry. The white lines show that the first 2 moves down are almost symmetric. and the second 2 pink lines would also be symmetric if the move were to end at 119 creating a perfect green a-b-c zigzag for red wave IV. This again validates the 119 region for an end to this move down.
Another painful possibility for the bulls is that the market moves right down to the 61.8% retracement @ 114.60 making the 2 moves marked by blue lines almost symmetric.
There however seems to be more convergence at the 50% retracement @119 and in either case i would look for capitulation selling and divergence on the rsi to lighten up on the short positions.
With unemployment out at 8:30, a gap down may provide this opportunity
As an overview, the whole pattern is a 5-3-5 zigzag marked with a white A-B-C.
Commonly counted is the first part.
It starts the white A wave with the march lows and counts 5 red waves ending at April 26th 2010.
The white B wave ends on July 1 2010.
The white C wave is where the confusion lies.
It starts on July 1 2010 and breaks up into 5 red waves.Red wave III further sub-divides into 3 yellow waves.
The most complex part is the yellow 4 wave which is a flat 3-3-5 (yellow A-B-C).
Yellow wave 5 subdivides into 5 waves that are apparent on shorter term charts and ends on 8th July 2011 . This yellow 5 wave is truncated as it barely breaches yellow wave 3 to the upside. This also completes red wave III.
The big picture says we are currently in a red wave IV with one red wave V to go which would complete white wave C and the entire move up.
The question now is: How low can red wave IV go?
We know that it cant go below 112.60 cause that would be the breach of red wave I.
If we draw fibs (green dotted) from the start of wave white wave C to its current high at yellow wave B we have 2 targets within range 50% @ 119 and 61.8@ 114.60.
Now looking for clues in structure on the 30minute chart.
The red wave IV started on the 6thof July and is tracing out a green a-b-c.
If green c were to end at 119, that would make a = c*261.8% and would also coincide with the above discussed 50% retracement.
Then there is symmetry. The white lines show that the first 2 moves down are almost symmetric. and the second 2 pink lines would also be symmetric if the move were to end at 119 creating a perfect green a-b-c zigzag for red wave IV. This again validates the 119 region for an end to this move down.
Another painful possibility for the bulls is that the market moves right down to the 61.8% retracement @ 114.60 making the 2 moves marked by blue lines almost symmetric.
There however seems to be more convergence at the 50% retracement @119 and in either case i would look for capitulation selling and divergence on the rsi to lighten up on the short positions.
With unemployment out at 8:30, a gap down may provide this opportunity
Monday, July 25, 2011
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.
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.
Thursday, July 14, 2011
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.
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.
Saturday, July 9, 2011
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.
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.
Tuesday, July 5, 2011
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.
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.
Tuesday, June 21, 2011
USDINR & BSE Sensex
This week i will be playing special attention to the USDINR which i think will give us clarity on the direction of the sensex. Once i have that I will post a separate BSE Sensex count.
The longer term version of the below chart that can be found here, demonstrates the importance of these levels.
The old red trendline was already broken and now very soon the USDINR will launch an assault on the new black trendline. Closing above this trendline is going to be trouble for the Sensex. The USDINR intraday can can be found here.
The longer term version of the below chart that can be found here, demonstrates the importance of these levels.
The old red trendline was already broken and now very soon the USDINR will launch an assault on the new black trendline. Closing above this trendline is going to be trouble for the Sensex. The USDINR intraday can can be found here.
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