econintersect.com
       
  

FREE NEWSLETTER: Econintersect sends a nightly newsletter highlighting news events of the day, and providing a summary of new articles posted on the website. Econintersect will not sell or pass your email address to others per our privacy policy. You can cancel this subscription at any time by selecting the unsubscribing link in the footer of each email.



posted on 11 December 2016

India's Stock Market: Nothing "Random" About It

from Elliott Wave International

Every day, the mainstream financial experts attempt to explain away fluctuations in stock market trends with some "fundamental factor" du jour, all of which boil down to this: good news causes a market to rise and bad news - to fall. Problem is, sometimes the experts end up using the same "fundamental" to justify the market's upward AND downward moves.

A Recent case in point, from South Asia:

"Sensex Down 324 Points as U.S. Picks Donald Trump as President."

VERSUS

"Sensex Makes Recovery Amid Donald Trump Win."

How can the same event -- the election of Donald Trump -- be bullish AND bearish for India's stock market? You might as well say that it moves at random, as most people do.

But before you join them -- consider that there may be something other than "fundamentals" driving trends.

In the words of Ralph Nelson Elliott, the discoverer of the Wave Principle:

"The wild, senseless, and apparently uncontrollable changes in prices from year to year, from month to month, or from day to day link themselves into a law abiding rhythmic pattern of waves...

"Current news and political developments are of only incidental importance, soon forgotten."

Elliott saw the fractal, a pattern that repeats in form but not in time or amplitude, as the overriding design of all stock market progress and regress. This diagram shows you the Elliott wave fractal's idealized development and subdivisions:

As for a real-world example of the Elliott wave fractal formation in stock markets, investors need only look at the last eight years in India's bellwether Sensex index.

From the beginning, in 2008, the Sensex was mired in a bearish slump, with the market circling the drain of a three-year low, having plummeted 50% from its December 2007 peak to below the 9000 level. But instead of focusing on the doom and gloom on Dalal Street (India's Wall Street), our analysts honed in on a telltale pattern unfolding directly on the Sensex's price chart.

Here, our November 2008 Asian-Pacific Financial Forecast featured a special section on India and wrote:

"The Wave Principle teaches that the stock market is a self-similar fractal. That means that some pieces of its price record -- which Ralph Nelson Elliott called waves -- resemble other pieces elsewhere in that record. The weekly chart of India's Sensex shows just such an example.

"Notice how the up-down sequence labeled Intermediate waves (1) and (2) (in the small red box) is a microcosm of the larger up-down sequence from the 2003 low to the present (i.e., waves 1 and 2, in the large black box). In both cases, the wave-two correction retraced approximately 50% of the wave-one advance.

"If we have identified this 'nested fractal' relationship correctly, it means that Indian stocks are about to begin Primary wave 3 of the bull market that began in 2003."

From the point of that 2008 forecast, the Sensex more than doubled in value before hitting the breaks and turning sideways in early 2011. After a year, the December 2012 Asian-Pacific Finanical Forecast said the uptrend was about to resume:

"Conventional observers may say that the social malaise and political gridlock at present make a bull market in India unlikely. Elliotticians and socionomists, however, know that those conditions are merely lagging results of the corrective period of the past two years. They are also precisely the kind of conditions in which major advances begin. In fact, as Indian stocks now advance in wave (3) of 3 of III, India's future looks brighter than ever.

Indeed, from there, the Sensex took off like a rocket in its most powerful bull-market phase ever, soaring to an all-time record high above 29,500 on March 3, 2015.

India's 8-year long bull market isn't an exception to the mainstream "random" walk model. It's the rule for all liquid financial markets across the globe, where collective investor psychology creates trends big and small -- regardless of news and events.


Learn Why the Elliott Wave Principle Works

Watch the Elliott Wave Crash Course. Stop reacting to news and fundamentals events. This free, 3-part video series provides a solid basis for why you should use Elliott analysis for your trading and investing decisions.

Get instant, free, access

This article was syndicated by Elliott Wave International and was originally published under the headline India's Stock Market: Nothing "Random" About It.

>>>>> Scroll down to view and make comments <<<<<<

Click here for Historical News Post Listing










Make a Comment

Econintersect wants your comments, data and opinion on the articles posted.  As the internet is a "war zone" of trolls, hackers and spammers - Econintersect must balance its defences against ease of commenting.  We have joined with Livefyre to manage our comment streams.

To comment, using Livefyre just click the "Sign In" button at the top-left corner of the comment box below. You can create a commenting account using your favorite social network such as Twitter, Facebook, Google+, LinkedIn or Open ID - or open a Livefyre account using your email address.



You can also comment using Facebook directly using he comment block below.





Econintersect Contributors


search_box

Print this page or create a PDF file of this page
Print Friendly and PDF


The growing use of ad blocking software is creating a shortfall in covering our fixed expenses. Please consider a donation to Econintersect to allow continuing output of quality and balanced financial and economic news and analysis.


Take a look at what is going on inside of Econintersect.com
Main Home
Analysis Blog
Is Free Trade Harming the Economy?
Bank of England Endorses Post-Keynesian Endogenous Money Theory
News Blog
Historical Photos In Color
Total Household Debt Nears 2008 Peak But Debt Picture Looks Much Different
Parental Proximity And The Earnings Consequences Of Job Loss
The Evolution Of Home Equity Ownership - Part Two Of Five
How To Easily ID Support And Resistance On Your Charts
Infographic Of The Day: Hollywood Vs. Real Life: How Realistic Are Romantic Comedies
Early Headlines: New Travel Ban, Trump And McCain On Media, Greek Tragedy, Iraq Moves On W. Mosul, US Pushes China On N. Korea, China Wants To Deal, Emoluments Test And More
New Seasonal Outlook Updates from NOAA and JAMSTEC Disagree ...
A Presser For The Ages
Level Of Migration To The United States Not Unprecedented
Earnings And Economic Reports: Week Starting 20 February 2017
Where People Use Voice Assistants
Organic Molecules Found On Giant Asteroid Ceres - Why That's Such A Huge Deal
Investing Blog
The Week Ahead: Trump And The Business Cycle
The Importance Of Quality In Diversification
Opinion Blog
Winter Olympics 2022: Beijing And China's Second 'Coming-Out Party'
Of Debt, Detriment, And Exorbitant Privilege
Precious Metals Blog
The Best Gold Stock To Buy Right Now
Live Markets
17Feb2017 Market Close: US Markets Close In The Green Surprising The Bearish Analysts, Monday Markets Will Be Closed For Presidents Day Holiday
Amazon Books & More






.... and keep up with economic news using our dynamic economic newspapers with the largest international coverage on the internet
Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government





























 navigate econintersect.com

Blogs

Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day
Weather

Newspapers

Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government
     

RSS Feeds / Social Media

Combined Econintersect Feed
Google+
Facebook
Twitter
Digg

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution

Contact

About

  Top Economics Site

Investing.com Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2017 Econintersect LLC - all rights reserved