Dear Members,
28 Dec 2017
In case you missed the Long term Update last week am repeating it along with the weekly analysis
below. Wishing you all a Happy New year. 2017 was rough as the second half Nifty edged higher on narrow breadth but no major correction as expected by me. Fortunately my sector themes and Value wave Stocks continued to play out. 2018 is witnessing the start and take off of some of the most important Macro trends that I have been tracking, and next year they might turn explosive and it would be very bullish for a few sectors. The Long Short report will spend more time on this into the
weekend. 2018 should also finally see the return of Volatility, that has been hibernating.
26 DECEMBER 2017
The weekly Elliott Wave commentary with Targets and levels is published every Sunday to Subscribers, This is only an excerpt of our observations from recent publications.
MEDIUM
TERM
NIFTY ELLIOTT WAVE UPDATE
As we head into the new year we are completing a 12 month rally. Nifty continues to
extend taking support on weekly averages, and momentum indicators whipsaw giving multiple divergences and false signals. Prices may extend into the early part of 2018 as seasonally bullish Dec plays out. January has seen many market peaks but the new trend of having the Union budget at the start of Feb might change that too and bulls may keep their boots on till the budget as well. The Big trend however has been in the metals stocks that are going up on the back of rising commodity prices, a
trend that few have been able to comprehend, and I like a market that no one understands. Metals are likely to keep surprising on the upside even after a market peak because of the falling dollar trend. The chart below is on an arithmetic scale READ MORE
LONG TERM
THE LONG & SHORT REPORT :- The LSR is our detailed monthly forecast of where the markets are headed, including sentiment indicators, inter market analysis, wave counts and a global perspective . Report now
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Long term Perspective and Basis: Updated 18 Dec 2017
Nifty continued its long term 5th wave formation into 2017. The pattern across indices has slowly morphed itself into a ending pattern especially on broad based indices like the Nifty 500 with perfect touch points. On the Nifty chart below however wave E of 5 is
still away from the upper line and an early termination will lead to what we call truncation. As discussed in the Economic winter reports this points to a final winter bear market that lies ahead. The winter bear market has been hard to spot as the nominal index continues higher. It can give us the slip in nominal terms but not relative to Inflation, USD, or Gold. . If the 5th wave does manage to extend it would be on the back of inflationary forces that have now become apparent, however
inflation adjusted returns of the Nifty since 2008 remain negative. Nifty adjusted for Inflation and Gold and USD are discussed under the Economic updates section of the website. In nominal terms the ending pattern may turn into a
running triangle and result in a rally if the slowly rising inflation turns into a trend of rapidly rising prices. This is not what I expect. I expect to see stagflation some time in the second half of next year as commodity prices continue to advance in the midst of the dollar bear market that has already started. I have discussed these trends extensively in my podcasts on Soundcloud so do not miss them. The entire rise from 2009-2017 so far appears like a 3-3-3-3-3, structure, and thus marked
as A-B-C-D-E. If you want to mark an impulse consider 1-2-3-4-5 done where 5<3<1. The conclusion is the same. The 2009-2017 advance in Nifty is the slowest in Indian stock market history and that should tell you something about its nature. The record highs do not change the big picture. And I do not have to agree with EWI on this, I have chosen to do so before and correctly so especially for the Indian stock market. Right now I hold my contrarian stance long term even if we do make one
more new record into the year end after the Gujarat elections
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