I think the probability of the second scenario panning out is very low in the foreseeable future...Therefore, in my opinion, the markets can remain largely rangeboung or head higher after a meaningful correction...
The second scenario is very possible in the long term when the entire financial system is once again in big trouble and the government is also bankrupt...but such a scenario would mean lot of other risks such as conflicts...
Interestingly the bearish wave count is having more room to be valid. If I am not mistaken the rally from 3918 can carry on till 3918+(4693-2250)=6361.. and still this ABC pattern will be valid.. though the internal counts will change.. I too feel there should be some decent correction, 500-600 points and further rally.. lets see how market behaves but in near term 5350 would be too big a resistance to clear...
The very fact that the probability of the second scenario is low in foreseeable future (as per fundamental reasoning) is a reason to be wary of it as most tipping points cant be discovered until they are past us. Besides, elliotticians are always looking for things that most believe are not possibile :-)
Since we are seeing a) lot of mid and small caps buzzing b) more retail interest c) increased coaxing from all sides that stock markets are the place to be and that too without proof of economic strength (what we are seeing is just recovery) d) some more social indicators of overbought conditions gives me reason to believe a fall is imminent in next 2-3 weeks upto March
A lot depends on the size of correction, if there is some 500 point correction, and things look not at all bad, it would provide a much required impetus for giving nifty a slingshot to 6300! But any correction severe enough to take Nifty below 4000 would dent all bullish sentiments, and the fact that correction so severe has happened will point to some major breakdown in the "recovery". I will agree with the points that you have mentioned but say that they still have long way to go.. especially retail interest. Corrections are not bad, if I am a bull i would definitely want it to happen. Being on the right side of the correction is what matters.
4 comments:
I think the probability of the second scenario panning out is very low in the foreseeable future...Therefore, in my opinion, the markets can remain largely rangeboung or head higher after a meaningful correction...
The second scenario is very possible in the long term when the entire financial system is once again in big trouble and the government is also bankrupt...but such a scenario would mean lot of other risks such as conflicts...
Interestingly the bearish wave count is having more room to be valid. If I am not mistaken the rally from 3918 can carry on till 3918+(4693-2250)=6361.. and still this ABC pattern will be valid.. though the internal counts will change.. I too feel there should be some decent correction, 500-600 points and further rally.. lets see how market behaves but in near term 5350 would be too big a resistance to clear...
The very fact that the probability of the second scenario is low in foreseeable future (as per fundamental reasoning) is a reason to be wary of it as most tipping points cant be discovered until they are past us. Besides, elliotticians are always looking for things that most believe are not possibile :-)
Since we are seeing
a) lot of mid and small caps buzzing
b) more retail interest
c) increased coaxing from all sides that stock markets are the place to be and that too without proof of economic strength (what we are seeing is just recovery)
d) some more social indicators of overbought conditions
gives me reason to believe a fall is imminent in next 2-3 weeks upto March
A lot depends on the size of correction, if there is some 500 point correction, and things look not at all bad, it would provide a much required impetus for giving nifty a slingshot to 6300! But any correction severe enough to take Nifty below 4000 would dent all bullish sentiments, and the fact that correction so severe has happened will point to some major breakdown in the "recovery". I will agree with the points that you have mentioned but say that they still have long way to go.. especially retail interest. Corrections are not bad, if I am a bull i would definitely want it to happen. Being on the right side of the correction is what matters.
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