Time Projection for next bottom

After publishing report of LAST VICIOUS BEAR MARKET OF THE DECADE

I received many mails and asked about time frame in which this will come so I have made projection based on Elliott waves and given detailed explanation below.

Some of the rules are below

Wave a should take less time then wave b

Wave b never take less time then wave a

Wave c always takes more time then wave a

Wave b normally takes 2-4 times of wave a

Wave c takes 50% time of wave a and wave b or takes 100% time of wave a and b

Wave a has taken 4 quarters when it falls from 21206 to 7697

Wave b taken 8 quarters which is exactly 2 time of wave a to rise from 7697 to 21108

Now where wave c can make bottom?

Either takes 50% time of wave a and wave b then bottom by Jun 2012

If it takes full time of wave a and wave b then by Sep 2013

                 Advanced concept of flat correction

In my earlier analysis of LAST VICIOUS BEAR MARKET OF THE DECADE

I have made various targets for wave c and now I am giving target based on advanced concept of Elliott wave for projecting wave c.

Below are the rules of that.

When wave a and wave b is similar in price then it is elongated flat correction and wave c will be much in larger price. And maximum it can extend to 2.618% of wave a.

Wave a was from 21206 to 7697 and wave b was 4697 to 21108 which is similar in price with just 98 point difference which is negligible.

Now as per the rule wave c should be wave a=wave c means wave c at least retrace close to 7697.

Before falling to 2.618% of extension there are two major supports which are at 1.382% and 1.618%

A=C=7697

1.382=6500

1.618%=5555

2.618%=3850

So as per advanced concept of Elliott wave considered then market at least retrace wave a means 7697 if extend the fall then 6500-5555-3850 are the levels.

I don't know whether you and I should expect such low levels but the Elliott Wave Principle suggests it and till the market proves it wrong it might be better to be prepared for the above scenario till a better one is clearly emerging.

If you are a trader capable of building shorts they would be profitable or put your money in to FIXED DEPOSIT.

                   LAST VICIOUS BEAR MARKET OF THE DECADE

From last many times I was advocating about wave C of normal degree wave flat correction, now correction is set and more correction is on the way ahead.

Let’s see first the impulsive wave structure from the originator of Elliott wave theory Ralph Nelson Elliott, wave 1, 3, and 5 moves in upside direction with next larger degree wave and wave 2 and 3 will down means the opposite direction of the larger degree wave. Now as per general low every action is always followed by a reaction and in market this rule is also applied with A-B-C flat correction once this entire cycle is completed we get two wave of next larger degree wave which are wave 1 and wave 2.

Indian market has completed its 5 wave and A-B  now C is under developments so first focus the A-B-C and understand what kind of news and sentiments develop this wave structure.

(1) WAVE A-this is bear market which we have seen when sensex fall from 21206 to 7697 at this time fundamental analyst positive on economy but price continually fall where  price of most of stock declines very fast.

(2) WAVE B-this is bull market which we have seen when sensex rise from 7697 to 21206 at this time fundamentals are not improving and no sign of turning and 99% of stock doesn’t recovery to its last high

(3) WAVE C-this is vicious bear market and market confirms that economy is not improving and volume pick up and price fall for the last time where 99% of the stock will fall at unexpected levels.

Now will focus on Indian market normal cycle as below

Now as per the rule wave C has to come down to complete normal cycle and to form the super cycle degree wave 2 bottom but before projecting wave C and wave 2 bottom first look at the 3 type of wave C correction.

(1) Weak wave B-wave b retraces 61.8% of wave a

(2) Normal wave B-wave b retraces 80% to 100% of wave a

(3) Strong wave B-wave b retraces more than 100% of wave a

Now as written above wave b has risen from 76697 to 21106 which is nearly 100% of wave a means this rise was normal wave b,now again there are 3 type of correction on normal wave b which are below

(1) C failure-wave c retraces less than 100% of wave b

(2) Common flat-wave c retraces 100% to 1.382% of wave b

(3) Elongated flat-wave c retraces more than 1.382% and extends to 1.618%

Now one thing is clear that wave b was normal correction and wave c will either c failure or common flat or elongated flat now we will try to find out the next possible bottom as per above three possibilities

(1) C failure-wave c has direct relation with larger degree wave 2 and as per the wave rule wave 2 doesn’t retraces wave 1 completely but usually do not retraces more than 61.8% of wave 1 but this is not final rule and it can extend but will not retrace entirely. Now if I project retracement of wave 2 of next larger degree wave from low of 2904 to 21208 then 9895 Is the 61.80% correction and another possibilities is that wave c retraces 78.6% of wave b then support comes to 10600 in both case wave c do not retrace entirely.

(2) Common flat-in this pattern wave c retraces 100% to 1.382% of wave b now if wave c retraces 100% then 7697 is the level from where wave b had made bottom and if extend to 1.382% then 6500 is the levels to stop.

(3) Elongated flat-in this pattern wave c retrace more than 1.382% and if it extend then next support comes at 1.618% extension. At 1.382% level is 6500 and for 1.618% level is 5555.

MY CONCLUSION AND NOTES-

Currently wave C is in to developments and with normal wave b and In final selloff to make bottom of wave c and larger degree wave 2 which will be vary vicious and people will loose confidence over stock market and economy.

Time will tell where wave c will end out of these levels 10600-9895-6500-5500.

I don't know whether you and I should expect such low levels but the Elliott Wave Principle suggests it and till the market proves it wrong it might be better to be prepared for the above scenario till a better one is clearly emerging.

In this fall of wave c and wave 2 fundamental conditions will be bad or worse then previous bottom. Prices decline relentlessly, fundamentals ultimately collapse in response.

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OVER ALL PERFORMANCE REPORT

FUTURES CALL NET PROFIT 74300 success ratio 77.77%

20000 profit in petronet buy at 155 book at 165
20000 profit in itc buy at 195 book at 205
12000 profit in hul buy at 388 book at 400
10000 profit in bata buy at 620 book at 640
9500 profit in reliance buy at 766 book at 804
6800 profit in hexaware buy at 85.60 book at 87.30
6000 profit in sbi buy at 1672 book at 1720
6000 loss in tata steel buy at 392 exit at 380
4000 loss in bharti buy at 382 exit at 378

NIFTY AND BANK NIFTY PROFIT 20400 success ration 100%

10500 profit in bank nifty with 8200 put option
9900 profit in nifty with 4600 put option

OPTION PROFIT 7000 success ration 100%

3800 profit in nifty 5000 call buy at 45 book at 121
3200 profit in bank nifty 9000 call buy at 102 book at 236

over all calls given 13 book profit in 11 loss in 2
success ration 84.61%

TOTAL PROFIT 101700

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