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Saturday, February 5, 2011

Fibonacci

The Indian Markets had a huge down day on Friday and Nifty broke the Crucial 5400 level(on HUGE volumes). Monday will be very interesting. Egypt is building up . We shouldn't forget that important LEGATUS event (here:::---http://legatus.org/public/index.asp) . I had plenty of spare time , so i thought of working out the Fibonacci retracements and extensions for the current count we are looking at . Chart below :


[ ii ] retraces 23.6% of [ i ].

[ iii ] is 123.6% of [ i ].

[ iv ] retraces 38.2% of [ iii ].

[ v ] is 61.8% of [ i ].

A retraces 38.2% of the 5-wave impulse. A was a 5-wave motive wave forecasting a zig-zag. And it has been a zig-zag . B was a 3 wave corrective wave retracing 75.61% of A. C is already looking a huge downward moving wave.Usually C has targets 61.8% , or 100% or 161.8% of A. We have already crossed far below the first two distances. the 161.8% extension of A is 5135.But the again if we take 161.8% of I , we get to the target 5007 and 138.2% extension target is 5125. Looks like we are hitting these targets in 7-days .
One after another stop is being taken out with full force. Looks like its game over. 2008 all over again. This is what 2008 looked like. See the stocks started going down in January with a huge nearly 2000 point drop in the Nifty in 2 weeks at one point.


This again shows that NEWS don't move the markets. I have a hunch that 2011 is going to be worse.
Keep shorting.

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