Sunday, September 28, 2014

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.

Sunday, April 6, 2014

The Emirates Commercial with Cristiano and Pele is Top Notch.

If I were forced to make a commercial with Pele and Cristiano, the 3rd and maybe 7th greatest player in the history of the game, the result would be the Emirates commercial. For those that know me as an Argentinean and Barcelona fan, such a commercial would be expected.
The elements of the commercial are just as i would have depicted them.
1. The two biggest egos in football getting deflated by the other presence.
2. Ignoramus fans that fail to equally acknowledge the presence of great players in their own right.
3. Seemingly proper stiff older generation Brit fans with all the facts.
4. Yuppie Brit fan of Indo/Pak origin.

Yes they all travel Emirates Business!

The EK agency obviously got short-changed in the past and is taking revenge!

Sunday, February 23, 2014

Yes... Another Emerging Market Make or Break time post...

For the third time i am compelled to post Emerging Market charts with the same title and a quick look at a 5 year chart will justify the post.

The weekly provides reference to a massive head and shoulders pattern that spans 4+ yrs.

This time frame of the next 2 week is crucial as you can see from the Elliott wave count on the daily, the line in the sand is 40.32 which is the end of the 1st green wave, since the 4th green wave cannot overlap 40.32 on the current move up. An overlap will will make way for a move  to 45.20+ temporarily. The longer term bearish picture stays open till 51 is taken out.

 On a bearish note if 40.32 is not crossed in the next few days and the market makes new lows at 36.40-, after a brief retracement (that stays below 43.91), the EMs are going to be ripe for a mauling.

My preference of the bearish scenario comes from the BRIC chart that displays similar characteristics to the EM chart but is decisively weaker, with the line in the sand at 34.49.

Wednesday, November 27, 2013

Dubai Expo 2020 & the DFMGI

If you live in Dubai, you cant escape it. Dubai Expo 2020 is plastered everywhere from your morning newspaper to the window of the little restaurant where you get your favorite shawarma.
The DFMGI has gone from approximately 1353 to 1622, 19% for 2012 and from 1622 to 2923, 80% to date making it one of the best performers globally.
The economic effects of actually hosting an event like an expo or the Worldcup are sum zero to net negative depending on the expenditure on essential infrastructure thats lasts a few years compared to porta infrastructure covered well by this article in the gulf news. ( This point is also made obvious by the protests in Brazil around hosting the Worldcup, who think that the public well-being is of more importance than national pride when it comes to allocating national resources and taxpayer funds.

What is visible locally in Dubai though is this extreme buildup of positive sentiment that has been built around winning the bid. Win or lose ... the end of this announcement and the following euphoria that might last a month or two will be a dampener on sentiment which may manifest itself on asset prices and on the Dubai Financial Markets General Index for which data is most transparent and easily available.

Sunday, September 29, 2013

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.

Sunday, September 8, 2013

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. 

Tuesday, July 16, 2013

BSE Sensex Elliott Wave Count Long Term

“Everyone kept saying ‘a top is not in place yet.’ They persistently pointed to the ‘normally reached’ levels of this or that statistic that were not yet there to reinforce their desire to remain bullish. . . . Apart from statistical measures of increasing blindness, this unwillingness to acknowledge what they themselves were already feeling revealed a comfortableness, a confidence, a conviction that whatever was happening – short-term survivable dips – would continue . . . until ‘the top,’ like a strip tease artiste of our youth would with decorum appear on stage, bow, and then, accompanied by applause from all the bulls eager to cash in on their excitement, would begin to twirl its statistical tassels in front of everyone.
“I’ve gotten so old I can’t remember the names of those ladies at the Old Howard, but I can remember that all you got was a flash of this or that, before they waltzed off. Stock market tops are like that. You know it’s there somewhere if you squint hard enough, but you never quite see it, so you keep waiting for more. And then, in the end, as the curtain comes down on the bull market you realize that the one rule about tops is not that they provide this or that signal, but that they come before anyone is ready.”
. . . Justin Mamis (re-quoted by Jeff Saut of Raymond James)

This is a follow up to the post on January 22nd, where i concluded that the top was in and any movement specifically over the November 2010 highs (21079), would invalidate the count. What followed was a 2000pt decline approx. This however turned out to be a 3 wave move (now counted as a 4th wave), followed by an up move (now a 5th wave) which basically recounted the Red C wave.
Green Wave II was therefore completed on May 20th (20,443). This Larger count will still be invalidated if the Sensex gets over the November 2010 highs (21,079).

Confidence in the Long term count comes from the short term action where a clear 5 wave decline from May 20th - June 24th is followed by a 3 wave corrective move which ended July 15th. Todays 250 pt gap down does well to push the market along the path of least resistance..

Both counts are likely to be invalidated if we make new highs above 20,062.83 (July 15th highs.)
The conclusions remain the same from the last post as long as the market does not invalidate the count.
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   

 Posted on July 16th, @ 2:10 IST with the Sensex @ 19820-30