United Colours of Global Stock
Markets
Based upon a tremendous response from the readers of my blogs and their
specific queries, I am encouraged to post the updates much earlier than my
scheduled interval so as to give them a better and informed perspective on the
stock markets with specific reference to Nifty.
Normally these predictive and forward looking statements are available for a
charge. However, it is imperative to give clarification to the general public related
to my previous blogs, because a majority of the public does not have means and
tools to make an informed analysis of the data and the news and it usually gets
carried away by the hopes and sentiments of the street.
By my past experiences, I have learnt that it is the first wave which
determines the onset of a trend. Even after the initiation of the first wave an
ordinary investor (generally a bullish investor) is always hopeful that the
market will touch its previous highs and will also perhaps cross them (assuring
himself – this time it will be different, without knowing the truth that each
time it is the same). It is the greed which plays here. The emotions come into
play but if you need to be in the stock markets, like any other business you
need to cut your losses by being unemotional.
By the time the second bearish wave sets in, the mix of fear and hope
sets in. Now it is a balanced mix of fear and greed which comes into play. “What
if the stocks fall further; what if I sell now and the markets bounce back; no
I don’t think markets will plunge further.”
By the time the third wave sets in, it is predominantly the fear which
acts now (What if the stocks fall further) and the combined fear of all the
ordinary investors makes the third wave. This can be an extended or a short wave.
The duration of the wave may or may not match the multi-period candlestick
patterns/ charts that I may display in this post of mine.
Keeping the above facts in mind, I will make an attempt to project what
I expect to happen in the stock markets, with specific reference to Nifty.
Though we are talking about the stock market index, for the ease of
understanding, I will be using the graph of EURINR with adapted Bollinger Bands.
Nifty made first bearish signal on the weekly candlestick charts for
the week ended on 05 March, 2015. This was followed by bearish fortnightly and
multi-period candlestick chart signals and confirmations.
Therefore assuming that Nifty is not bearish and being hopeful that it
will recover and overshoot its previous highs is certainly neither right nor
possible despite whatever promises or hopes any analyst or fund manager may give
to the investing public. Please see the charts. Nifty has already made one
complete wave of bearishness. Bearishness in Nifty started almost a month earlier
than it happened in Dow and DAX, though both Dow and DAX and respective technical
indicators had given adequate warnings/ signals of the start of the bear phase.
A 0.25% rate increase or no increase by FED will make no impact on Dow or DAX.
The markets have already determined their course – downwards with small intermediate
pull backs.
Intermediate (two – three fortnights)
projections for Nifty
Nifty has made a pattern on the fortnightly candlestick charts indicating
intermediate pull back/ reversal (calling it bullish will be inappropriate). I
expect the market to move sideways to upwards atleast till October end.
Down below is the comparison of Nifty current graph with the graph of EURINR of the past.
Comparison of Nifty Line Graph with
that of EURINR.
Here is the link to all my previous posts, which will serve as a good
reference to this post of mine.
Please await my post on Gold and
Silver.
Best wishes.
Contact:
The author can be contacted at riskadvisory@outlook.com
Disclaimer:
These extracts from my trading books are for
educational purposes only. Any advice contained therein is provided for the
general information of readers and does not have regard to any particular
person's investment objectives, financial situation or needs and must not be
construed as advice to buy, sell, hold or otherwise deal with any commodities,
currencies, securities or other investments. Accordingly, no reader should act
on the basis of any information contained therein without first having
consulted a suitably qualified financial advisor.
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