By Waves Strategy Advisors, For more information please visit www.wavesstrategy.com
From investing and trading perspective it is necessary not only to look at short term charts but to also align oneself with what the long term trends are suggesting.
It is imperative to know when the long term trends are about to reverse so that the surprise element is not there and people do react along with newswire that this was completely unexpected. Markets tend towards surprising majority of the crowd and it is upto us to evaluate all plausible scenario systematically to derive the highest probable outcome.
The below is a brief of what our “The Financial Waves” monthly report is showing:
India continues to stand independently in the Global markets with Indian currency the worse performing asset class among Asian peers. Prices of Gold has touched life time highs in terms ofINR as the currency hits life time lows i.e. USDINR made life time highs. Equity market continues to be in strong downtrend and is moving in the down wave which was pending before finally bottoming around mid of 2014.
In this research we have explained why the rally in Gold is only localized and not Global. Gold in terms of USD has so far not even retraced its high made in May 2013, let alone the highs of 2012 and 2011 when Gold topped out at $1900. Also a true rally in Gold happens when it rallies against all the major currency and does not exhibit a local phenomenon due to domestic currency.
Indian currency crisis: When the currency was at 55 we have updated about impending currency crisis and the mainstream experts are realizing it now. Also the selloff in currency clearly explains why government interventions does not change the major trend but produce only short term spikes. If government actions could have changed the trend then Japan would not have faced more than 2 decades of deflation!
Food security Bill is said to be the main culprit for depreciation in currency and economic instability as the bill will cost 1.30 lakh crore. We do not rule out the fact that it is a huge subsidy bill which is announced exactly at the wrong time but this does not justify the sharp selloff in Equity and Currency. The trend on downside in Equity was due which we are seeing now and the fundamental logical explanation will keep coming as and when market keeps falling. Also remember the most bearish fundamentals come exactly when the market is at the bottom. However, news cannot be used to do objective trading but Elliott wave along with Time cyclesprovide the details on how matured the current trend is and what to expect next.
DJIA continues to fail around 15500 – 15600 levels and has fallen by more than 900 points from the top. Drop below crucial level mentioned below over next 2 weeks will confirm that the major trend in DJIA has probably changed from up to down. A synchronized move across world markets will always provide better trending moves.
Reliance Industries was one of the leading stocks in the bullrun from 2003 to 2008. This stock has been a major underperformer since then. However, Reliance Time cycles shown below also suggest the major bottom should be formed by ……...
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Useful for: Long term traders, long term investors, elliott wave, Equity traders, technical analyst
Related to: Equity market,Reliance,Sensex,Gold,DJIA,USDINR,currency,Elliott wave,technical analysis,long term analysis