The bear is at hand guys. Unfortunately many will not 'see' it come until they are consumed by it!
This is to be expected. Most people are ALWAYS on the wrong side of the trend at major turns. The bear of the magnitude we discuss here is big ( I expect NSE 20 Share index to fall by more than half.
).
Before reading
The Wave Principle of Human Social Behaviour and The New Science of Socionomics by Robert Prechter (available on amazon.com) I did not like one piece of statistic that was always thrown about that over 90% of investors fail.
The reason for the failure is now clear to me. Man has two 'brains'. the
rational part is responsible for action that leads to, e.g., creating an aeroplane, flying man to the moon etc. The
unconscious brain is responsible for man's emotional side. Being made up of the limbic system it is the source of the herding impulse. The herding impulse evolved as a protective mechanism to enhance survival. The emotional brain is much faster than the rational one (for example, a mother may instantly dislike a stranger by his/her mere appearance and may not be able to explain easily enough the 'reason' for the dislike. This is so as to protect her child. Also,if a bomb goes off, or there is a snake nearby, people will instantly run wild without thinking why they have to run.)
Many in finance fail because they attempt to apply rationality to the markets when they should simply follow the rules and guidelines of wave behaviour ably enumerated by R.N. Elliott in 1938 in his seminal The Wave Principle. Human emotions create
waves which are patterned. Linear thinkers, and conventional economists are, will see a market rise, and, just as in Phyisics, will tell the market will continue to rise until an external force causes it to change direction. Guys, this is not the way to view financial markets!
Wave analysis:Guys watch the above impulse wave keenly. It follows Elliott's rules and guidelines impeccably.
Notice how wave (3) subdivides into smaller 5 waves (i.e waves 1, 2, 3, 4 and 5)!
Notice that wave 3 itself subdivides into 5 smaller waves!
Notice that wave (3) is elongated as compared to wave (1)!
Notice that wave (4) is longer and more complex than wave (2). This is the guideline of alternation.
Notice that bracket wave (4) ends in the territory of wave 4! This is the guideline of depth of corrective waves.
Detailed Analytics:Wave (1) terminates at 5313.84
Wave (2) at 5346.56
Wave (3) at 5026.79
Wave (4) at 5100.51
Wave lengths:
Wave (1) = (5499.64-5313.84) = 185.8
Wave (2) = (5346.56-5313.84) = 32.72
Wave (3) = (5346.56-5026.79) = 319.77
Wave (4) = (5100.51-5026.79) = 73.72
Wave (3) is approximately 1.618 X wave (1)
Wave (2) is Fibonacci 0.382 X wave (4).
Wave (4) is Fibonacci 0.236 X wave wave (3).
Assuming wave (4) is complete (evidence suggests it is ) then we can target the termination of wave (5). Options:
a) Wave (5) being equal to wave (1) then wave (5) terminates at (5100.51-185.8) =
4914.71b) Wave (5) being Fibonacci 0.618 of wave (1) then wave (5) target is [5100.51-(0.618 X 185.8)] =
4985.69c) Wave (5) being Fibonacci 1.618 of wave (1) then wave (5) target is [5100.51-(1.618 X 185.8)] =
4799.89The c option is more likely. I expect lots of volatility starting tomorrow 11th May. In that case an elongated wave (5) would make sense. Also, as I have been saying for sometime, I want a clean break of the NSE 20 Index below 4907 level to increase odds of the bear to almost certainity. Option c would make ensure of that.
Summary:Expect huge volatility starting tomorrow 11th May. Watch of 4907 level. Re-evaluate your share holdings in the NSE.
Conventional thinkers waste time building shelters when they are unnecessary and then have no shelters when they need them the most. Socionomists do the opposite.