Lately there has been a lot of volatility in all segments of the markets. Volatility normally indicates a reversal.
Also , all markets need to follow a pattern which is dependent on each other. Gold normally rises when the usd falls, Dow jones and the indian markets NORMALLY go in tandem. However Nasdaq movements have at times been varying from Dow jones.
We will discuss the technical aspects of four segments in this article together which may help the readers to draw their own conclusions.
Nifty has taken a strong support at the diagonal end as shown below-
In effect it means that the medium term bullish upswing MAY have started. We are also presuming that the point of completion of the diagonal marked in red, signifies the completion of wave 4 and the upswing to start as wave 5.
Wave 5’s are normally equal to wave 1 which puts a target to 15473 which is just a little higher than the previous high.
Can the markets go higher and resume the bull run once the above target is reached. Anything is possible as elliot wave analysis is a study on a range of possibilities and we choose the most plausible one. However the fact remains that one needs to be cautious once the above target is reached and we start observing the price action at that time.
Dow Jones Industrial Average
Dow Jones has made a huge expanding triangle pattern which needs to be respected and paid attention to for some time at least. The expanding triangle patterns occur frequently at 4th wave corrections and this tallies with the overall long term count shown below-
Now a zoomed in view of the 5 wave expanded triangle below.
USD FUTURE INDEX
Most likely we should see a gradual ratchet down of the Dollar index.
See below for the zoomed in graph
Gold has been in a corrective now since long. This correction has been assumed as a bullish flag pattern in which the last leg had been still continuing. (At times it may give a wrong indication as the waves can subdivide.)
However now with all things considered the bullish flag correction last leg may be just getting over. However the follow up price action of the same may be required .