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    Friday, October 10, 2008

    the long term picture...

    to me the decline in mkt from jan 2008 uptil now appears like wave 2 of third impulse of super cycle started from 1980. the supercycle wave one lasted for 12 years, corrective wave two of supercycle lasted for 11 years and the current supercycle wave three therefore should go on for atleast 12 years or more from 2003 onwards. the trendline support for sensex on this degree wave count on my charts is around 6100 presently and will keep shifting up.

    as suggested by our friend praveen shamain, i agree that the downmove from jan 2008 would take shape as one large wave A.

    these waves that i labelled as ABC-X-ABC will be reduced to W-X-Y and finally as big A which will complete in this year 2008 somewhere near yday's low or 2997, after which 50% or 61.8% retracement of this big A(might be about 5075 on nifty if current bottom is 2997) takes form of big upward wave B in the first half of next year followed by big wave C terminating closer to 2000. therefore it makes sense to average investment holdings at bottom that we get/got near 2997 now(2997 because it is fibo 61.8% of total bull run from 920 to 6357) i.e C-5 or big A and sell them near big B completion. i expect a simple big zigzag ABC corrective. time period less than 2 years is not allowable for big ABC to complete. of course all this is speculative in nature but lets see if it comes true, some magnitudes and/or structures if change will have to be taken care of as the waves proceed.

    abhay r somkuwar.

    Posted by abhay r somkuwar at 7:56 AM

    3 comments:

    Anonymous said...

    i hope u remember me. anyway i don't mind if u ain't :-).

    but i feel ur analysis is still bit complicated. anyway if the current downturn is tsunami, then in dec 08, I am expecting Hyper-Tsunami. Its speculative too but cud be possible.

    FCCB are another time bomb waiting to burst.

    Majority have to hate equity for new bull run to start. How come ?
    Either if bear mkt is long term in nature Or if crash is very-very severe and will take some time to retrace.

    Various factors like
    Macroeconomics, central banks power, business cycle, govt response and learning fm history won't allow great ABC to become really longer in time frame. Rather these factors will play an aggressive role to calm down things and prob by next 6 months, mkt will find ur great C bottom and will start moving upwards (but silently).

    Gaurav.

    October 10, 2008 at 10:31 PM
    abhay r somkuwar said...

    gaurav, it is seen that technicals and fundamentals go together on a larger time frame, technicals do reflect whats happening in economy and many times discount ahead of it happening on macro scenario. why worry about fundamentals factors on which we have little or no control and which will be known only after the event happens we will also not know all of it or the reasons. stock mkts though seem irrational at times, have a great sense of discounting and reflecting macro economics. ta and charts do have a story to tell and if one reads correctly can benefit.

    October 11, 2008 at 8:08 AM
    Anonymous said...

    i agree with that. as such i m not against any technical analysis. Infact i have made my own software for TA.

    But I believe too much in Business Cycle or various kinds of macroeconomic cycle. If probablistic results (or probability of better result) from elliot wave analysis is x, then for me, Business cycle results are 10x.

    it wud be better if u concentrate on cycles too. that mixture wud be better or more reliable. cycles are both fundamental and technical in nature.

    i can only help that much. its ur choice at last.

    October 11, 2008 at 10:35 AM

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