Nifty:EOD- 5.3.12

Beginning 5.3.12
Yesterday I had written:
Q
So the only plausible labeling left for us is a WXY for W4 in following manner:

As Y.a has played out as a 5 wave form:
5459-5400=59
5400-5436=36
5436-5353=89
5353-5397=44
5397-5298=99
Y as a whole has to play out as a zig-zag with Y.b retracing at the most 80% of Y.a(=5459-5298=161) i.e. maximum 129=5427. (Though the ideal 61% has already been done).
UnQ


Now we have two probabilities:
1.Either Y.b has ended at 5392 and Y.c has begun ;
2.Or Y.b is continuing in some combo form still unknown to us.


One of the thumb-rules to see whether Y.b has ended or not is to see whether its channel is intact or broken?

The blue channel broadly depicts the Y.b
The red channel tries to capture Y.c
Those who wish to keep a tight Stop-loss for shorts can do so at  5369.65 


Rest as we proceed.


Best of luck for today's trades.


Raghu


How have we opened:

Thus we are in Y.c.
Target minimum 0.62*Y.a to 1.61*Y.a=5292-5132 
Form: Either 5 wave Impulse or 5 wave diagonal.
Done so far:
(i)=5392-5324
(ii)=5324-5369
(iii)=5369-5303*


Bolo Jai EW kee !!!!!


10.05 AM


I have closed all my shorts and would be off for some personal work. Shall be writing the EOD post now.


Y.a=5459-5398=161
Y.b=5398-5392
Y.c in progress has already done its minimum 0.62*Y.a
To me this Y.c looks like developing into a diagonal though it has not yet overlapped 5324.
(i)=5392-5324
(ii)=5324-5369
(iii)=5369-5290*
Has (iv) started?
If yes then we shall be spending rest of the day in a small range,overlapping 5324( though this overlap may be seen just as sw2 of (iii) as well). So minimum one more leg to the down remains( for the most conservative like me).

1.00 PM update
Even now two probabilities

But below 5270 ,Y.b as expanded Flat would get cancelled.

EOD

So my lovely-lovely WXY has completed its minimum requirements. Lovely lovely because it gave me lovely returns.
And what a controlled end it has been.
A look at details of Y.c shall speak that for me:

I call it a " controlled end" for the sheer beauty with which (iii), (iv) & (v) of Y.c were executed so as to complete the ideal 5 wave form where one of the waves is an extended one---though in this case (iii) is an extended version of (v)[ instead of (i) of which most of us are used to].

Now what?


Now as per the Count being followed by me,W4 has done the minimum required  as WXY and W5 to the up may begin:

And this W5 has to do minimum 0.62*W1=166 and its likelihood of going above 5629 should be rated minimal as W3 was hugely over-extended. Thus I am expecting a truncated W5.


There is an Alternative to this Count:
W4 as ABC instead of WXY

I am accepting this Count as it comes close to the probability of B retracing 90% of 3 wave A.


Does that mean we have no chance of going down?


I would never say that. Markets can do anything they wish and I am not going to predict them.
All I am upto is to identify the pattern and make my trade set up accordingly.
If we open below 5260 or go below 5260 without going above 5310,I shall label it as Y.c continuing its 3rd wave and take position accordingly.


Conclusion:
By completing the minimum condition for Y, market has prepared itself for the next trend deciding move. Now it can move in any direction depending upon the sentiment that builds up on election result. As election results would continue for a long time,volatility would be there. A tick above 5370 would confirm end of downtrend and going long on all dips should be started.
Downmove has completed its minimum but that does not mean that upmove would begin immediately. Yc can very well go upto 5131 before turning up.


Raghu