SENSEX Long term count

SENSEX on a Wave 3

After many months of near sideways movement there was a huge H&S breakout in the BSE Sensex today. I think this is the beginning of a third wave up. It targets many thousands of points higher. Stop loss at 18,200.


From a fundamental viewpoint as well Indian stocks should do very well in a high-inflation plus high growth scenario. Demand driven inflation allows companies to preserve margins. Although costs rise so do sales and the nominal values of profits increases. An added kicker to stock prices is the high growth in the economy which means that the number of units of the products sold also increases (assuming constant marketshare).

Keynes vs Hayek Hip-hop

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Hip-hop economics

Fractal correction patterns playing out of Dow & SPX

Gold inflexion point at 1115

Last stop for impulse count out of triangle is 1115 where wave 3 could become the shortest of the 5 waves. This is a critical spot.

After that we would have to consider the move off $680 to be an impulse with a series of very bullish 1-2-1-2s and see then we should see much higher highs.

Although gold is looking extremely bullish right now, the divergence created by no new highs in gold miners (GDX) and silver (SLV) makes me worry that this is a blowoff top.

Case for top already in

A dollar count to go with the market top in case the market turns down here. Its still 50:50 but there is a valid count for a dollar bottom - it could have been made already.

The case for one more high

Complex correction upwards on the SPX



Much simpler wedge pattern on the DOW. When it breaks the lower trendline, look for a kissback and down she goes!