Market Grind - IC News

Published: Fri, 08/14/20

The Nifty has been finding it hard to get past the 11400 mark for a while. 11350-11433 is a congestion zone because its a 78.6% retracement of the previous fall and a gap left behind above 11433.

A close look at world equities shows that after a long 2 month consolidation many are breaking out on the upside as seen on these charts and that might mart the start of a new rally. The question is only one of size scale and implications for the larger trend.

These posts from the last 2 weeks cover the trends in world markets observed from an Elliott Wave Perspective.

Rohit

(P.S - The Sunday Webinar is on GoTo Webinar and not GoTo Meeting - Correction)

DAX

The German DAX index has taken support at the lower Bollinger band and bounced back to close above the green 40dema. The recent fall was a-b-c, so a good chance that at 12253 we completed wave 2 of 3 and wave 3 of 3 up can start where 3=1 goes to 16000 next. ARe we looking at a European stock market rally then? Why not.

S&P 500

The US index is now a whisker from an all time high at 3393 inj FEB 2020. We closed at 3351. The speed of the rise may appear to slow but that is a function of the lower Volatility and not a loss of trend. prices continue to hold key avearges and trend higher with participation from the broad market and other indices.

Taiwan

The Taiwanese stock market broke out of a 4th wave triangle pattern. The 5th wave often looks like an ending pattern, but the alternate is to consider it as a series of 1-2-1-2, which makes a very bullish case for the Asian stock market. A wave 3 of 3 is going on and we are now at all time highs again.

Seoul Composite

The Korean index is past the point where I have marked wave B, So that confirms that a 3 wave decline is over. The bottom was on the reverse channel line of the highs of the last 20 years. So that makes for a good level for wave 4 to end. This should be a new wave up then unless proven otherwise.

Nikkei 225

The Japanese stock market index long term is probably starting something new. Wave 3 is a possibility after an A-B-C crorection over the last few years. The bear market may have ended in wave Z in 2009. Japan will then be the rare case in world markets that made it through walking the middle path.

In the near term this was the one market not donig much while the rest of the world was making advances. The 2 month consolidatoin maybe ending as prices again attempt to move up and closed above the 20dma and the daily momentum crossed over to the buy side. Wave 3 of 3 is what I would think of the next move because the recent rally marked as wave 1 of 3 was shorter than the first one from the march low [which was a leading diagonal]

S&P 500 CFTC positions

One look at this chart shows the net long/short position of traders based on the CFTC data. Shorts are down but not out. And no where long on S&P 500 futures. So much for believing that every body is long.

Russian RTSI index

The Russian RTSI index becomes the latest to come back to making a higher high in a new rally. So each of the world markets are joining the move up.

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Rohit Srivastava
www.indiacharts.com
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