PSU Bank index

Several People want to know my view on PSU banks. The bank index just completed wave Y I think after a lot of extentions into wave 5 of (c) of Y. Now long term bear markets can go onto wave Z and so that is where judgement is needed. Knowing the story I think that till we are done with the recapitalization process we should be open to volatility and wave Z lower. So right now I will only anticipate a wave X. Back to the wave 4 high or back to the neckline that was broken last year needs to be seen. Both options are open. We do not know if the X wave will be a large zig-zag or a triangle that will go sideways. 

Rough Rice Continous [CBT]

Of all the commodities Rice became the first one to breakout of the entire range into a 3rd wave clearly. Others keep forming basing formations but are not clearly breaking out. Prices are set up to go past the previous all time high near 25$, but the real question is whether we can go to the top end of the channel near 65$?

Eicher Motor

The long term wave count of Eicher motor had to be reworked .I earlier marked it showing the 5th wave is complete. However with the correction ending at the bottom end of the reverse parallel channel it is possible to argue that wave 5 up as a final move may still be pending. The lower end of the channel is at 12,800 and the top end of the channel is at 200,000. The wide range is a function of the stocks own large moves in the past. 5th waves can be devious as they sometimes truncate and sometimes achieve all expectations and therefore they keep you on your toes.

Crude

Oil's momentum has been falling for a while as it struggles near the gap zone. One of these days there should be a negative reaction to the 20dma near 30 as wave 2 down kicks in. ideally.

Silver

Silver is in wave iv down and should find support near the 20dma and previous wave iv low near 16.85

India Vix

The India VIX spiked to 75 in Jan 2008 when the Nifty fell 30% in days, and then it went down all the way to 20 in the next few months before the market was ready to break the Jan low of 4448 on the Nifty. So are you surprised that the India VIX is falling from 80 to 30 over the last 2 months. And what stops it from going back to 20?

The second chart here shows you that the India Vix goes back to 83 in Oct 2008 in the final crash of that bear market. But as the market was making a double bottom it went back to 29 in the next 5 months. The market took off to the upside then from a reading of 29.

So this years 40% crash in the Nifty pushed the India VIX to 86 and from there we dropped to 26 recently and have been near 29-30 for days as bank nifty below made a double bottom over 2 months and started to rally.