Would like to bring focus on the world economic situation , elliot count and the markets going along the the upper ledge drawn parallel to the multi month channel . This ledge is very common and normally happens when all economic parameters point towards a fall and yet the markets refuse to give in. Right from the time this ledge commenced , the markets have risen only about 6 percent and taken about 3 months to do so.
This ‘walking on the ledge’ as I call it can continue for sometime more and at the same time the markets can fall briskly with momentum tomorrow. The choice is of course on the investor and his mind set on what he wants to do with his investments.
However at the same time , once this above mentioned correction is over , we will embark on a multi year bull run. The best case , in case you believe in and agree with the above setup, is to wait till the fall to around 11000 -11300 levels.
US trade war is only escalating and with China now bent on not ready to lose face will only retaliate. Brexit may be uglier than realised. US imposing higher taxes on Mexico may not benefit either. Iran -us continue to simmer. India GDP lowest in 5 years but still the highest rate of growth in the world.
As shown in the chart above , the markets finished the top at the point marked 5. From there we are in a volatile expanded triangle whose two legs are finished and the leg down is pending.
Positive aspects in India
The present government getting a majority in Lok Sabha and in near future getting majority in rajya sabha will ensure passing of important legislature much easier. Also India being the highest growth , can be a major factor in drawing money to India in future.