[Technical readings carried forward from previous weeks are shown in italics. Readers can easily identify the new arguments which are written in regular font]
Last week we discussed, "Index did form a Bear candle after 3 Bulls candles on its Weekly chart, exactly as we feared … fall was the downward 'G' leg … Index created bearish 'Island' … 'G' turned 'larger' than 'F' … low was close to previous two bottoms of Sep'15 and Dec'15 … Further weakness below the Sep-Dec'15 lows would take it closer to Yellow lower parallel to the 0-X line … watch if 'G' shows any arresting candle closer to the lower channel, and starts closing above its previous day … lower Yellow parallel is at about 24K, close to 23873 (Nifty 7131), the low of 16th May'2014 … A continuous fall can continue for 8 or 13 days … 'G' is the last leg of a Diametric, and buying at the bottom of 'G' could be worthwhile … "
The week saw Sensex breaking below the Double Bottom levels of Sep & Dec'15, but turning extremely volatile & tricky thereafter. At the end of the week, however, it settled 479 pts or 2% lower. Except IT, which finished +ve, about a percent higher, all the other sectors ended -ve. While Realty & Small-Cap Indexes shaved off over 7%, the Capital Goods, Power, Banks, Mid-Cap, PSUs and Metal Indexes lost 5-7% each.
The "G" leg fall has now continued for 10 days. In these 10 days, Index has shown inability to close above its previous day's high so far. Also, Index made several attempts to close above the Double Bottom area of Sep-Dec'15 at 24834-868 (Nifty 7540-51), but failed.
After creating an "Island" as marked on the chart, break below the Double Bottom area is a -ve indication. It is a case of previous supports turning into resistance.
Index continues to form lower top lower bottom enclosed inside the Yellow colored falling channel we have been showing on the initial Daily chart. The top-line of this channel is 0-X line of the Complex Corrective structure we identified as per NEoWave.The bottom-line is the parallel to the 0-X line.
As per NEoWave, Complex Corrective structure involves standard correctives separated by "x-wave". As shown on the following chart, such a structure usually gets perfectly channeled inside two parallel lines :
Any Complex Corrective structure can comprise a Double (involving one "x-wave") or Triple (involving two "x-waves"). As shown on the chart above, the rally from Aug'13 to Mar'15 was a Triple, and the fall thereafter is a Double, at least so far.
As per NEoWave, the pattern implication for a Triple is 60-70%. The Triple Combination rally from Aug'13 low of 17449 to Mar'15 high of 30025 measured 12576 pts.
Accordingly, once the rising channel was broken during Mar'15, we had calculated its 60% retracement level, i.e. 22500, as our downside target.
At last week's low of 24388, Sensex is just 1888 pts short. As long as Index remains in the falling channel, this downside possibility would remain open.
The current 10-month fall, so far, contains a Double, at least so far. Its 1st Corrective was identified as a Diamond-Shaped Diametric. Thereafter, we identified Symmetrical formation inside "x-wave".
The 2nd Corrective started from 20th Aug'15, and is suspected to be developing as a Bow-Tie-Shaped Diametric. As required, it showed "contracting" legs till "D", and "expanding" legs thereafter.
During last 10 days, Index is forming "G" leg of the 2nd Corrective. As we observed last week, a continuous fall can last for 8 days or 13 days, without closing above previous day. The 13th day would be coming Wednesday.
We do not know if the current downward phase would complete as a Double, or continue to form a Triple. However, in any case, as we said last week, buying at the bottom of "G" leg could be worthwhile.
If the phase converts into a Triple, the rally from the bottom of "G" would form as the 2nd "x-wave", and 3rd Corrective would open downwards thereafter.
In a Triple, 3rd Corrective could form as a Triangle, the lower-degree "a" leg of which could be extremely violent. So, if the rally proves only a 2nd "x-wave", then we should get off and re-invest at the bottom of such "a" leg again.
The broader market panicked last week. The Small & Mid-Cap Indexes crashed 6-7%. It appears investors are throwing the towel, and when they do, its generally considered good time to buy, provided Index actually turns, i.e. starts to close above its previous day's action.
We'll watch is such an opportunity is provided in the days to come, at our own time criteria, at our own levels, as described above.
_________________________________________________________________________________
The value of the Baseline for '2015 was about 22500. For the current year of '2016, since the Yearly plot has advanced to the right side, the value of the lower trajectory line for '2016 is now at 25500, as we had marked on the chart.
As we argued, anytime the Sensex dips below 25K during '2016, it would break its Yearly Trajectory. Break of the trajectory could have implications for the coming year.
Structurally, it would not only consist of "G" leg fall inside the 2nd Corrective, but also raise the possibility of the current corrective phase from Mar'15 stretching to 13 months till Apr'16.
After the 2nd Corrective is over, a new upward move can begin. However, if the Yearly Trajectory gets broken below 25K, and a recovery thereafter fails to confirm a new upward move, then structurally Index could even open a 3rd Corrective.
If the first 2 Correctives completed as Diametric patterns, the 3rd can develop as an Ending Triangle. However, 1st leg of such a Triangle could be "violent", forcing investors to throw in the towel.
As we argued, "Bow-Tie Diametric" combines "contracting triangle" in its first half with "expanding triangle" in the 2nd half, in order to create the "Bow-Tie" shape.
Earlier, we suspected that the entire fall from Mar'15 high of 30025 (Nifty 9119) is a Complex Corrective involving "x-wave". We suspected this because the fall was enclosed inside a parallel channel, which is typical of such a Complex Corrective.
Complex Corrective, by NEoWave, involves 2 or more Correctives separated by an "x-wave". We, accordingly, marked the 1stCorrective as 7-legged "Diamond-Shaped Diametric" from 4th Mar'15 to 15th Jun'15.
The "x-wave" developed till 20th Aug as a 9-legged "Symmetrical formation", and retraced 1st Corrective by exactly 61.8%. As per NEoWave, small x-wave cannot retrace more than 61.8% of 1st.
After 20th Aug, the 2nd Corrective opened. We initially suspected 2nd could complete as a "C-Failure Flat" if its "C" is retraced faster. But Index could not retrace its "C" leg, and therefore we marked the up move from 18th Nov to 2nd Dec as "D" of 2nd, and converted 2nd to a Diametric.
Diametric is a 7-legged pattern marked as A-B-C-D-E, and it can have either "Bow-Tie Shape" OR "Diamond-Shape". As per VP's rules, size of "B" usually determines how the Diametric would shape up as.
If "B" is "small", then the Diametric usually shapes up as "Diamond". However, if "B" is large, i.e. when it retraces more than 61.8 of "A", then it could shape up as a "Bow-Tie".
Diametric, remember, combines 2 Triangles. In "Diamond" shape, it combines "Expanding Triangle" in its 1st half with "Contracting Triangle" in the 2nd half. However, in "Bow-Tie" shape it combines "Contracting Triangle" in the 1st half with "Expanding Triangle" in the 2nd half.
As can be seen on the Daily chart, the 2nd Corrective "contracted" from "A" to "D", i.e. each subsequent leg was "smaller". From "E" onwards, "Expansion" is seen because "E" has now turned "bigger" than "D".
Rather than ratios, the "Bow-Tie" shape is necessary. The tentative shape is shown with Dark Red lines on the initial Daily chart above.
Price-wise "E" is already close to the previous support of Sep'15 at 24834 (Nifty 7540). We may watch if "E" shows an inclination to end itself.
Remember, Sensex was testing the crucial Monthly Base line we showed on the following chart in the 8th month of fall from its top in Mar'15. Indeed, we considered that Index was at a crucial price and time juncture.
However, Bulls could correct only 38% of the falling segment. This is going to stretch the 2nd Corrective both time-wise, and price-wise. As we argued earlier, if the Index was unable to complete its corrective phase in 8 months, i.e. in Nov'15, it could get stretched to Apr'16, which will be 13th month from the top made in Mar'15.
In any case, Index has so far not generated "faster retracement" of its falling segment, which we required for confirming that corrective phase from Mar'15 has been completed.
It will be only when such a faster retracement gets generated, and Index later breaks above the channeled Complex Corrective phase we showed on the following chart, that +ve structural options can open.
Remember, by NEoWave, all Complex Correctives involve "x-wave", and most of them are perfectly enclosed in a Parallel Channel.
As per our time-price analysis, we were looking for "reversal" at the Monthly Baseline in the 8th month of corrective phase. The Baseline joined Sensex' lows of '2003 and '2009 on its Monthly Log Scale chart. This Baseline provided support during Aug'13 for a 19-month rally.
Time-wise, Nov'15 was the 8th month of the current corrective phase from Mar'15. The time of 8 months matches with last major corrective phase from Jan'13 to Aug'13, which also consumed 8 months.
Prior to '2013, there were two major corrective phases, first during Jan'08 to Mar'09 and second Nov'10 to Dec'11, and both lasted for 13 months, another Fibonacci Number.
Based on these historical numbers for major corrective phases time-wise, it is possible that if the current phase stretches beyond Nov'15, i.e. 8 months, then it can extend to Apr'16, i.e. continue for 13 months.
In the previous 13-month long Complex Corrective phase during Nov'10 to Dec'11, we have seen the 0-X line working as a resistance, as can be checked on the chart above.
Indeed, we compared the current post Mar'15 fall with this 13-month fall as both are channeled Complex Correctives involving x-wave. As can be seen on the chart above, even after crossing the 0-X line after Dec'11, Index came down (by 80% of rally) for the higher bottom. We, accordingly, consider 0-X line as crucial.
In terms of 2-year cycle, we argued both Sensex and Nifty could lose about 25% from its top valuation. Shaving off 25% from their respective high of 30015 / 9119, projected about 22500 / 6800. However, to achieve these projections, both Indexes need to weaken below their Base-Lines.
In terms of VP's Grid Levels, Sensex recovered from the Grid level of 25150, as we've been showing on the following chart. It will be only below the current Grid Level that the Index could test the next lower Grid level of 22700, which is closer to the downward projection we made last Dec, i.e. 22500/6800.
Market is unlikely to have made a permanent bottom, as we assumed 2nd Corrective to develop as 7-legged Diametric because the 1st Corrective was also a Diametric. We argued that in a Complex Corrective involving x-wave, the two Correctives would have similar "severity".
Index had made a high of 25375 (Nifty 7563) on 16th May'14, when the new Govt was elected. With last Friday's low at 25119 (Nifty 7626), Index has fallen back to the levels of election results, indicating that the euphoria seen after the political change is now over.
In Dollar terms, Sensex was already below the lows of 16th May'14 six weeks ago, as can be seen on the following Dollex-30 chart. This Index is 30% lower than its peak during '2008, and 18% lower than its highs of Mar'15.
The Dollex-30 chart also shows Head & Shoulder formation since May'14, the Neckline of which was broken with a gap-down action.
The FII Net Investment figures turned -ve since 22nd Apr'15 of this year. FIIs sold Rs. 30300 crs. worth of stocks since that date, pulling the Sensex down 18% so far in this year.
Last time FIIs sold out was during Oct'07 to Mar'09, when the Index shaved off as much as 63%. FIIs invested Rs.612000 crs after Mar'09, but Dollex-30 showed un-impressive gains during this period, as it is still below its '2008 highs.
Ever since the new Govt got elected, the Dollar-Rupee equation as gone against FIIs who invest in Indian equity in Dollar terms. The Dollar has appreciated nearly 15% from Rs. 58.27 in May'14 to Rs. 66.92 recently.
Falling stock prices along with appreciating Dollar presents a double-edged risk scenario for the FIIs, and their exit from Indian market is a natural result of that.
The question is whether this could cause a '2008-09 like scenario, and if the 8-year cycle, due in '2016, has arrived a year earlier.
Late last year, we expected market to hit a major top during January of this year, based on "January-Topping cycle".
As we showed on the following chart, except during '2006, all the major and minor tops on Sensex occurred in the first quarter of every Calendar Year, for 15 years since '2000.
We also pointed out that market has seen major corrections or profit-booking modes every 2 years ever since '2004.
Except during '2013, when Sensex corrected only 13%, all other corrections saw cuts of either 25-35% (like during '2004, '2006 and '2010) or 50-60% (like during '2008).
The last major profit-booking was during '2013, and in '2015, 2-year cycle of profit-booking was due.
So far, in this year, the Sensex has corrected 16% from 30025 (Nifty 9119) to 25119 (7626). The damages in individual stocks and sectors are selectively much larger.
Structurally, we suspected a channeled Triple Combination rally was getting over at the beginning of this year, and as per NEoWave, the pattern implication for such a Triple if about 60-70%.
Remember, the Triple Combination rally was from Aug'13 low of 17449 (Nifty 5119) to Mar'15 high of 30025 (Nifty 9119), as was marked on the chart below.
The 60-70% retracement to this rally calculated to about 22500 (Nifty 6700), and we had warned accordingly in the beginning of this year.
As can be seen on the chart above, the 0-X line and its parallel line on the opposite side enclosed the developments, upwards from Aug'13 to Mar'15, and later downwards from Mar'15 onwards.
As per NEoWave, 2nd Corrective should break the lows achieved by the 1st. Break of Jun'15 lows would, accordingly, be a normal thing to happen.
As per NEoWave, the time-similarity amidst the legs is symptomatic of Diametric development. Accordingly, we identified the development from Mar'15 to Jun'15 as a Diametric, which was of "Diamond-Shape" variety, and post-Jun'15 pattern is also suspected to be a Diametric.
The post-Jun'15 structure retraced exactly 61.8% of the 1st corrective from Mar'15 to Jun'15. We marked post-Jun'15 structure as a "small x". As per NEoWave, "small-x" can retrace maximum 61.8% of 1st corrective.
According to NEoWave, "x-wave" joins two standard correctives inside a "Complex Corrective" development. There are 3 types of x-waves depending on how much the x-wave retraces the preceding corrective.
A "Small-x" retraces maximum 61.8%, "Common-x" retraces about 100%, and "Large-x" measures "minimum" 161.8% of the preceding corrective. There can be maximum 2 "x-waves" in any Complex Corrective.
As per NEoWave, Triple Combination moves are usually well-channeled, and such moves carry 60-70% retracement as their "pattern implication", which would project about 22500 (Nifty 6750) as a downside possibility.
The Index broke below its 200-day EMA with a gap-down action, and it is currently trading below it, as can be seen on the following chart :
We have been cautioning investors since the beginning of '2015 also because Index had achieved breakout implication of 5-year Ascending Triangle from '2008 to '2013, we showed on the following chart.
The largest leg of the Ascending Triangle was the fall of '2008-09, i.e. about 13000 Sensex points. As per NEoWave, the normal thrust implication out of a Triangle is 100% of the largest leg of the Triangle.
From Aug'13, when the Ascending Triangle got over, Sensex has moved up almost exactly 13000 pts from 17449 to 30025 :
The Sensex top at 30K levels was exactly the Grid level as per VP's Grid Levels System (GLS), which we have been using since last 5 years.
It was also pointed out that Index looked "overstretched" after rallying for 12 quarters, which was a situation similar to major top of '2008.
Based on Nifty PE Ratio, we warned that market appears to be near "Bubble Territory", as was shown on the following chart :
The 22500 level is also close to previous major tops of '2008 & '2010, and is also the lowest level of "Sensex Trajectory" we showed since beginning of this year. It is also value of the line joining '2003 & '2009 bottoms on Yearly chart of Sensex :
The likely Sensex trajectory for the year '2015 could be provided by the channel shown on the Yearly chart above.
As we saw previously during '1988 to '1994, and again from '2003 to '2007, Sensex' bull phase trajectory is usually contained in 2 parallel lines roughly. Sensex, in the past, maintained its trajectory for 5 years or 7 years, before breaking it.
The current trajectory began from '2012, and '2015 would be 4th year in this trajectory, which could break either during '2017 or '2019, if the past is any indication.
For the year '2015, the trajectory projects 32800 on the upside and 22800 on the downside.
For '2016, however, the lower line is at 25500 as marked.
The current trajectory is at a lower angle (about 30 degrees), as compared to previous 2 trajectories of 1988-94 and 2003-2007. The angle of ascent for both was identical at 60 degrees. The lower angle of current trajectory has been despite heavy FII Inflows and political change.
Technical readings carried forward from previous weeks
Since Aug'13 till Jan'15, the biggest fall was seen on the day of Election Results, about 1503 pts.
Post Dec'14, however, bigger drops are happening.
The disparity between Sensex and broader market was shown on the comparative chart below.
The broader market outperformed Sensex from Nov'13 onwards, and its out-performance was especially significant from 16th May onwards, the day of Election Results, as can be seen on the chart.
In the meanwhile, investors may keep a tab on the risk factors. Major event like Election Results, Budget, are now behind us. Hope rally has played out. FIIs selling off is a risk factor, though, So far, this has not yet played out on any meaningful scale.
Another set of risk factor would be Global, like Dow breaking its base-line on its monthly chart, etc.
On one higher degree, we considered post-Aug'13 development to be F leg of a larger Diametric formation from '2008 onwards as shown on the chart below.
This long-term scenario marking the larger Diametric was published on 6th Feb'12. This Diametric assumption, as was argued,compared well with the 11-year Diametric formation previously seen during '1992 to '2003.
As shown on the chart above, F is the "Expanding" leg of the 7-legged Diametric from '2008. In the previous instance of the Diametric during '1992-'2003 period, F leg had hit new highs during '2000.
In other words, F leg of the diametric making new highs is nothing new. After hitting new highs during '2000, G leg went down till '2003.
We argued for a Diametric development from '2008 onwards because we observed time-similarity within its legs, which is symptomatic of such a pattern. So far, most of the legs, except B and D, have consumed exactly about 13 months.
On the monthly Close-only chart given below, one can see Sensex crossing previous highs, indeed taking their support for reaching further newer highs for the F leg :
We may watch if Sensex shows maturity signs at current levels and starts cracking.
We considered this alternate scenario when Sensex moved above 2008-10 highs. It shows corrective phase from '2008 completing as a 5-legged Ascending Triangle. This scenario can open much higher targets, 30000+ for Sensex.
The 30000+ target is nothing but 100% (+/- 25%) breakout implication of the largest leg of the Triangle.
According to NEoWave, corrective phase should consume more time than the move it is correcting. After the 56-month rally from May'2003 to Jan'2008, Sensex has corrected for 67 month from Jan'2008 to Aug-13, i.e. a larger period as required under NEoWave.
The following picture should throw some light on the post-election movement on the Sensex since '1980 onwards :
Since '1980, major up-moves were seen mainly after formation of a Congress-led government.
Now that a BJP-led Government is taking over, and has a clear mandate for development and governance, we'll watch if a new era is taking over, wherein previous historical political parameters will get challenged.
By NEoWave logics, complete and faster retracement of the last upward leg, would confirm that the Diametric structure inside the 2nd corrective is over. Look how faster retracement of the 6th rally on the chart above signaled completion of the 1st corrective.
We, however, cannot rule out that a sufficient time-correction is required after any multi-fold rally. As shown below, such time correction can last for as much as 161.8% to 261.8% time ratio to the multi-fold rally.
As for the last multi-fold rally during '1988 to '1992, its correction lasted for 262.8% time ratio, from '1992 to '2003.
We argued in favor of long term consolidation phase beginning '2008 because prior to '2008, Sensex had multiplied 7 times from its '2003 lows. We argued, such multi-fold rally could results into a multi-year consolidation phase. Inside such a phase, even moves reaching new highs are considered its internal part, and not as breakouts.
As we noted, after 11-fold rally during '1988 to '1992, Sensex consolidated for 11 years till '2003 (261.8% time ratio). Within this consolidation, Sensex corrected as much as 30-60% every time it came closer to previous highs or even after hitting new highs.
An ideal "suckers rally" usually involves making a New High. As we can be seen on the chart below, Sensex moved higher than its '1992 highs during '1994 and '1997, but reacted by over 30% both the times.
Later during '2000, it broke 1992/1994/1997 highs, by as much as 1500-1600, only to lose 58% later. After a severe corrective phase lasting from '2000 to '2003, Index broke '2000 high during '2004 by 100 pts, but even then shaved off 30% before the next rally could take place.
All this happened because the 11-year long '1992-2003 phase was a multi-year corrective phase correcting the preceding 11-fold rally from '1988 to '1992.
On the super-cycle degree, we are considering a "Terminal" development since '2003 onwards. The Terminal was suspected because its 1st wave from 2003-2008 was a label-3 "corrective" pattern. (As against a normal label-5 Impulse pattern).
The 2003-2008 rally was internally marked as a corrective pattern called a Running Diametric.
Also, more importantly, it is only inside a Terminal that 2nd wave can be Triangle. (as against this, in a normal Impulse, 2nd wave cannot develop as a Triangle, only 4th can).
Under the circumstances, if our assumed F leg continues beyond 13 months, i.e. beyond Jul-Aug of this year, then we could be forced to consider the current up-move as the 3rd of the Terminal Impulse, as per the Green labels shown above.
The basic NEoWave requirement is that such a corrective phase should consume more time than the move it is correcting.The '1992-2003 corrective phase, remember, continued for a time-ratio of 261.8% to the preceding 4-year rally from '1988 to '1992.
As per Wave Theory, a corrective phase shapes up as 3-legged Flat/Zigzag, 5-legged Triangle or 7-legged Diametric (which basically combines 2 Triangles).
The question, therefore, is whether the corrective phase ended as a 5-legged Triangle in Aug'13, OR it would continue for 2 more legs and form as 7-legged Diametric.
As was shown on the chart below, all the up-down legs from Jan'13 to Aug'13, except "b", consumed exactly 20-25 days, and formed into a 7-legged Diametric (Diamond-Shaped variety).
As per VP's observational rules, all the legs, except "b", of a 7-legged Diametric tend towards time-similarity. Indeed, by reverse logic, when legs begin to be similar in time, the structure is more likely to form as a Diametric.
Similar to the pattern explained above, on one higher degree, we also observed time-similarity from '2008. All the legs, except "b", consumed about 13 months since the year '2008.
The question, now, remains if we continue with the Diametric assumption or complete the post-'2008 development as a 5-legged Triangle. As we have been explaining, we can open possibility of ending the phase as Triangle only if we see strength continuing beyond Jul-Aug of this year.
The market is being moved mainly on a/c of FII buying heavyweights selectively, even as many stocks have been trading near previous lows in the broader market.
During 8 quarters from Oct'08 to Nov'10, FIIs invested over Rs. 215000 crs as per SEBI data. In the current 8-quarter up-move post Dec'11, FIIs invested over Rs.242000 crs. Thus, post Dec'11 up-move has so far remained smaller despite the larger investment from FIIs.
As for DIIs, SEBI data shows divestment of Rs. 32400 crs during Oct'08-Nov'10, and of Rs. 43800 crs after Dec'11. Thus, the up-move of last 8 quarters remained smaller despite the higher FII investment, and larger divestment from DIIs.
Despite huge FII buying in the last five years since '2008, the Sensex was still closer to '2008 high so far, despite Net Investment of Rs. 369901 crs till Jun'13 by the FIIs.
How reliable is the FII Net Investment data coming from SEBI is another question. We generally see the inflated figure in FII buying matching with DII's selling figure. However, above observation is made assuming the data from SEBI is correct.
Not related to Wave Labels so much on an immediate basis, VP's 30% Principle shows that Sensex is at a risk of 25-30% cut every 2-3 years, ever since '2004, i.e. in the last 9-10 years.
In this period, the 25-30% cut was seen from the tops in May'2004, May'2006, Jan'2008 and Nov'10 so far. The last bottom was during Dec'11. Sensex has now completed 27 months since then without a 25-30% cut.
We should keep the 30% principle in the back of the mind, and act as required when the time comes.
Appendix : Super-Cycle-degree Wave-scenarios for Sensex
For Super-Cycle-Degree wave-scenario, consider following ASA Long-Term Index. This Index has been created by combining a very old Index compiled by a British advisor (from '1938 to '1945), with RBI Index ('1945 to '1969), F.E Index ('1969 to '1980) and Sensex (thereafter till date).
The wave-count presented shows that the market is into the lower-degree 5th of the SC-degree 3rd or 5th wave.
The detailed wave-count from '1984 onwards can be seen on the Monthly chart given below. The 2-4 line shown on the ASA long-term Chart above, and Monthly chart below, would determine if the post '1984 Impulse is a Super-cycle-degree 3rd or 5th.
Super-Cycle-Degree 3rd (or 5th) began since Nov'84. Its internal 3rd was an "extended" leg, which achieved exactly 261.8% ratio to the 1st on log scale. The Sensex is now forming the 5th Wave, and the same could develop as a "Terminal", because its lower-degree 1st wave from May'03 onwards developed as a Diametric (which is a "corrective" structure, rather than an "impulse"). Within the non-directional legs, 2nd was exactly 61.8% of 1st value-wise, and 161.8% time-wise. The 4th was 38.2% of 3rd value-wise, and 261.8% time-wise.
While the 4th is shown as a 3-legged a-b-c Flat on the monthly chart above. Alternatively, the 4th is shown as a 7-legged a-b-c-d-e-f-g Bow-Tie Diametric on the Monthly chart below. The chart below also shows 11-year parallel channel from Apr'1992 to May'2003. As shown, if one projects the width of this channel on upper side, such a projection gave 20000 as the "minimum" target. This forecast was achieved.
 .
As mentioned above, the lower-degree 1st from May'2003 to Jan'2008 appears to be a Bow-Tie Diametric, marked as a-b-c-d-e-f-g. It is called "Diametric" because it combines two Triangular patterns, one initially "Contracting" up to the "d" leg, followed by an "Expanding" one. The contraction point is the "d" leg, and the legs on either sides of it tend to be equal. Accordingly, "c" and "e" were equal in "log scale", both showing about 60% gains. Similarly, "g" was equal to "a", both showing about 115% gain.
The Diametric development from '2003 to '2008 is considered to be the 1st wave of the Impuse. Due to the corrective structure in the 1st leg, the higher-degree 5th could be developing as a Terminal. Since '2008, we are into its 2nd wave, which could continue to develop over a period of 7-8 years beginning '2008.
As per NEoWave, break of 2-4 line confirms a Terminal development, and If the 5th proves to be a Terminal, the Super-Cycle-degree label of 3rd will have to change to 5th, because only a 5th of a 3rd cannot be a Terminal. Only a 5th of the 5th can be a Terminal. The Super-Cycle-Degree marking for 1st and 2nd as shown on ASA long-term chart, would then change to 3rd and 4th respectively.
|
No comments:
Post a Comment