WHERE ARE YOU GOING NIFTY

“Qua Vadis” or “Where are you going” NSEI is the question uppermost on traders’ mind in India. Having reached 4800, and wiping away the small time traders (who dared to stick on to their stale longs) by falling briefly to 4711, the index has rallied quite smartly in the last few sessions. But I would like to sound the alarm bells here if you are thinking the worst is over. We should get at least one more dip to test the lows again, potentially even breaking it. There is immediate resistance at today’s high around 5040, and beyond that at 5100/05. Although the prior fourth wave at 5190 area will become a reflex point (read more about the importance of reflex points on my book: Five Waves to Financial Freedom, it is likely we will fail to reach that high. Even if it does, you will see it come down sufficiently to take profits on any shorts you may have at or above 5100. Those who are thinking of buying for the medium term should continue to be patient. Bear market rallies such as these have a habit of abruptly turning around. Good luck.

Credit:  Ramki

ELLIOT WAVE ANALYSIS OF GOLD

As you can see from the chart, we seem to be experiencing an extension in the fifth wave (even though the third wave was also an extended wave). Although Elliott has said that at least one impulse wave will be extended, we have seen several cases of a trend having two extensions. ( we will not quarrel with those who disagree, because what works for us seems to work well!)

Going back to the Gold chart, wave 3 did a 300% projected move of Wave 1. Then we got a brief correction after which the fifth wave took off to the upside again. There was no way anyone could have predicted a second extension.

The next question is are we anywhere near the top? My feeling is we will likely experience a bout of selling around 1895/1925 and witness a quick correction down to 1815 area. But then we will try one more time to go up. That final push may well take us to around 2055, but as of now, I would urge you to be very careful during that push. There is nothing as yet in the horizon to make anyone want to dump Gold, but when the bubble does burst (and one possible level lies around 2055), we will get a fairly aggressive move down to 1480. We shall see.

Credit: Ramki

NIFTY IS IN ITS MAJOR FIFTH

Nifty is in its Major 5th wave having completed its 4th wave in the week of 25.10.2002 and has now completed the sub wave 1 and in its corrective phase of "abc" from 2008. And the same is market in a small yellow circle in the above chart to understand the "Positioning of the market" in the current scenario. Where that "c"(of the (2)nd wave) will end and when the next sub waves 1 & 2 will unfold: A most likely pre-election.

An alternative scenario would be: The (2)nd wave completed at 2253 and the sub wave 1 comleted at 6339 and sub wave 2 is on.

Some of the sub waves would be more clear in "Day Charts".

Credit: Ilango