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Sunday, May 6, 2012

Nifty::2004 analog

I think the pullback from 4790 was over at 5000 level and now we should see more selling to come. The 2004 index that i was watching is playing well , though i was looking for a straight nose dive to 4500 level that did not happen. instead we stopped at 4790 and now we should resume selling.  There are also astrological similarities with 2004 as i got to know from the blog below::

http://marketsmusic.blogspot.de/
".......... On 6th June Venus will pass through the disc of Sun like an ant moving through a golden plate. Don't try to see it by naked eyes - it may damage your eye sight. Use necessary protective measures. Such a Venus transit through the Sun disc(as seen from the earth) had taken place in June 2004 and after six months a massive earth quack and Tsunami struck the world. Do meditate and pray to have strength to face the natural calamities that may be due in Nov/Dec 2012. ........"

Here the 2003-2005 chart.  The markets took off for the rally on June 21 .  We saw sell -off around Tsunami time.
( The BIG one that everyone remembers )

We should be setting for something similar. The nose dive that i was expecting to 4500 is not exactly similar . We had a stop at 4780 from where we bounced till 5000. We have sold off from those levels to reach 4840. And i think more downsides to come. Minimum target for me is 4640 to close the GAP . And i think we should head lower. We had a freak trade for June contract of 4504 on 21st of May . these figures have been achieved on earlier occasions and theres no reason for me to think that this will not be achieved this time.
The descending triangle breakdown itself has a target of 4600 . 34 week BB( bollinger bands) lower level is at 4610 , 144 daily BB lower is at 4580 and so is the 89 week BB Lower level.

Another logic is that we need severe sell off and bearish sentiments for the FED to declare QE3. FOMC is slated for June19-20. Nice timing.

I have drawn an expected flightpath for the Nifty . Lets see. For the moment I am holding shorts . The FII-option data is also looking bearish with huge selling by FIIs .

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6 comments:

  1. ADMay 15, 2012 at 10:26 AM

    Dear Jonak

    Not only the 2003 similarity but also the 2009 simialrity is there. Every time index has made a new bottom it has gone to retrace it and from then on a large rally emerged. Nifty made a low of 2539 in Oct 2008 and after 4-6 months went down to retest the lows in March 2009 and then began a big rally. Something very similar happened in 2003 as you have very rightly pointed out.

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  2. ADMay 15, 2012 at 10:29 AM

    So my 2 cents is that the nifty would make a low towards 4640-4530 as you have mentioned which would coincide with the end of correction in S&P and other world indices and then we might see a big rally and possibly a new bull market. I am hoping that this correction should end by May end.

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  3. jonakMay 15, 2012 at 6:40 PM

    yes... this 2004 chart should fit in for the rest of the year too..lets see

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  4. TekkiesureshJune 3, 2012 at 8:33 PM

    @ Jonak,
    2004 period was a global credit expansion period. Prior to the bull market of 2003 to 2008 beginning, Indian Market had undergone a prolonged period of consolidation, reflected in the sideways in the charts of those days. Recovery from the 2009 low itself is a bear rally, which saw a double top above the 6000+ levels. The bear has now matured and grown more vicious with age. The subprime crisis has now morphed into sovereign crisis. Bull markets are born in periods of extreme pessimism ,hopelessness and most often chaos. The social mood has actually not deteriorated enough for a bull market birth. On the other hand, the next leg of the bear could be pretty serious-a longer term C wave if you like. The first confirmation will occur when the 2011 low of 4531 is broken.
    Regarding the Venusian eclipse on June 06, 2012, this occurs in pairs-the first of this pair was on June 08, 2004.Before this, the last pair was in December 1874 and December 1882.Before that it was in 1761-69.
    Seven Year War ended in 1763, in Britain. There were credit crises in 1763 and 1772.Bankruptcies multiplied.National debt rose from 98 million pounds in 1761 to 131 million pounds in 1767.Chronic food shortages led to public disorder. East India Company which was a blue chip then, which was upwards from 1766, crashed heavily bringing widespread losses.Hyder Ali and Tipu Sultan lost the Mysore throne to the English, closer home.
    1874-1882 marked the longest Economic depression in the US. The Panic of 1873 triggered a severe international economic depression in both Europe and the United States that lasted until 1879, and even longer in some countries. The depression is now known as the Long Depression.
    In September 1873, the American economy entered a crisis. This followed a period of post-Civil War economic over-expansion that arose from the Northern railroad boom. It came at the end of a series of economic setbacks: the Black Friday panic of 1869, the Chicago fire of 1871, the outbreak of equine influenza in 1872, and demonetization of silver in 1873. In September 1873, Jay Cooke & Company, a major component of the United States banking establishment, found itself unable to market several million dollars in Northern Pacific Railway bonds. The failure of the Jay Cooke bank, followed quickly by that of Henry Clews, set off a chain reaction of bank failures and temporarily closed the New York stock market. The New York Stock Exchange closed for ten days starting 20 September. Of the country's 364 railroads, 89 went bankrupt. A total of 18,000 businesses failed between 1873 and 1875. Unemployment reached 14% by 1876. Construction work halted, wages were cut, real estate values fell and corporate profits vanished.
    It is interesting to note that Uranus in Aries and Pluto in Capricorn were in a waxing square formation in 1874 to 1882 period, just like we have now .Incredibly Pluto was in Capricorn and Uranus was in Aries, in 1761 to 69 as well.
    TekkieSuresh
    http://niftyastrotechnicals.blogspot.in/

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  5. TekkiesureshJune 3, 2012 at 8:35 PM

    @ Jonak,
    ( I continue the blog post...)

    With this background, it appears that the Venus 8 year double eclipse leads to a credit expansion crest followed by severe deleveraging. Exactly in the middle period of 2004 to 2012,in 2008, all stock markets formed a crest. And have declined substantially since then. Since there are 7 square formations between Uranus and Pluto between June 24 2012 and March 2015, we may expect the international bear markets to end by 2015.
    This is why I consider the recovery from 2009, as a bear rally. And the next big down move has probably begun.
    Bala Sir is right in his observation that the Venus eclipse effect of June 2004 manifested as Tsunami more fully in December 2004. This is because eclipse effects generally take six months to manifest.
    Currently we have three eclipses happening rather close together. Solar eclipse of May 20, lunar eclipse of June 04 and Venus eclipse of June 06, 2012. Surely the effect in six months time is going to be catastrophic.
    Meditation, prayer, financial prudence, good judgement and willingness to help our fellow human beings are the need of the hour.
    Tekkie Suresh
    http://niftyastrotechnicals.blogspot.in/

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  6. jonakJune 4, 2012 at 5:17 AM

    thanks for all that info...thats huge stuff

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