Hi ,

Just want to share thoughts on last week, coming week and develop a trading strategy.

1) Intermarket Cycles/News & Price
I was wondering if last week's bullishness was due to news followed price or price followed news. The news being GS and other financial firms posting "good" results and divestment of PSU's in India. I mean i guess fractals/elliot wave/TA are based on rules and not news, but did the news affect the price last week? One can never know that but according to this blog (http://syhardingblog.com/new/), historically, the expiration week in Dow/S&P in july is generally positive.

Also, do the inter-market cycles still suggest that nifty under-performs dow/s&p?

2) 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 whats the time frame for the pattern to play out?

3) Trading next week:
It seems the 5th wave up is in progress. However, according to this blog-
http://syhardingblog.com/new/

"But the weekly patterns are working out in July as they typically do in other months. The market tends to be down for the week before the options expirations week, which it certainly was last week. Then the options expirations week tends to be positive, which this week certainly has been.

Keep in mind that the rest of the pattern is that the week after expirations weeks tends to be back down."

People have different opinion, but what if the market remains weak the coming week? Would look forward to the appropriate wave count. Nifty seems over bought for last 2 days and therefore a correction cannot be ruled out. The difficult part would be to buy the dip or short the correction because maybe the bearish head & shoulder would play out. In either case, appropriate support/resistance level can be followed but a view should help.

I dont know the wave count but its difficult to take a positional trade. I guess its best to stay out when there is confusion.

4) What is clear break? Is that a EOD closing below a support ? How does one know its a clear break?

What if this week market thinks of correcting itself..the news may be CIT bankruptcy, "slow recovery" etc... would that be an incidence of price following news or vice versa.. since most of the news is known anyway..

What if market suddenly wakes up to "Chinese Bubble" ? see here:

http://www.er.ethz.ch/
http://www.technologyreview.com/blog/arxiv/23839/

http://econohistory.com/article/188

Challenging a seventy year old market forecasting theory isn’t easy. It is tougher if one is a practitioner himself and a believer in the Elliott wave theory of price fractals. However, when we talk about TIME FRACTALS, PRICE FRACTALS have a strong challenger, even if the theory of TIME is at a nascent stage.

We should admit that it was a pleasant surprise after nearly 10 years of digging price patterns to reach TIME FRACTALS. The latter part of the year will be devoted to explaining ELLIOTT FRACTALS through TIME. The two rules of Elliott i.e. 3 wave is never the shortest and 2 wave does not get into 1 are rules of TIME also seen in Elliott waves. Currently EWT is the closest theory to TIME....

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.
This is just an update for detailed preferred and alternate views on NIFTY visit the member’s login page or sign up for a free trial on TICKS.INDIA.

http://updates.orpheus.asia/article/2194

Hi,

Looks like the market is in a mood for correction. My guess that is...
with friday being a bond auction day..liquidity would be tough to come by for equities..

On the lighter side, last to last week, every trader and his mummy was talking abt
bearish heads and shoulders.. sure enough sign that it would not happen.. ofcourse with hindsight..

today every trader and his dog is talking about new highs.. what will mister market do..?

we will see.. i stay out or maybe stay short..

Found the answer about News Vs Price, from the master- Bob Prechter in his latest newsletter:
"
Question: But we’ve all seen the stock and bond market bounce or dive on the release of money supply or Consumer Price Index figures.

Bob Prechter: Sure, for a few minutes. And sometimes it doesn’t react, does it? The release of such figures never changes the market’s larger trend. On all time horizons longer than two minutes, news lags the market.

"

4) What is clear break? Is that a EOD closing below a support ? How does one know its a clear break?

Thanks.. understood what a clear break is, looking at break of supports/resistances today and yesterday. And as u had indicated in ticks too.