FORUM UPDATE – JULY 2009 NIFTY EXPIRATION

Q: Do the inter-market cycles still suggest that nifty under-performs DOW/S&P?

A: Intermediate Sensex vs. Dow, Nifty vs. Dow, Nifty vs. S&P500, performance cycle remains negative. There are a lot of analysts using seasonal tendencies. We don’t look at seasonal tendencies so closely.

Q: Neckline Retest: I think the neckline has been retested and nifty is above the neckline. It seems the bearish head and shoulder would nullify if nifty is above 4500. We will never know that till we reach there but what’s the time frame for the pattern to play out?

A: Yes. You are right, conventional resistances are challenged. If conventional levels are playing, it should turn now.

Q: I guess it’s best to stay out when there is confusion regarding Elliott?

A: The wave count A-B-C is lacking as C is not a clear impulse. This is why a W-X-Y could be assumed. The move up has also gapped and is accompanied by an over reactive momentum. From a cycle perspective, if minor cycles have to act they should now.

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