Elliot wave theory on Bombay Stock Exchange

Yes, like everyone else i am also bitten by the elliotwave theory bug... so i decided to put it to test. Since many bloggers / columnist commentators have sucked curiosity juice from dow jones's comparison to elliotwave i am going to compare it to international stock exchange my pic India's Bombay Stock Exchange's Sensitive Index (SENSEX).

Elliot wave theory works on basis of fibonacci number sequence. where wave 1,3,5 are upward going waves while 2 and 4 are correctional waves. This theory was put in practice by Proff Prechter who was a Trading Analyst who set a 440% return record on options account in 1989 trading match .... ok enough of his background, although this is mathematically related theory pertaining to fibonacci sequence and its golden ratio of 1.6343 Precther and co. beleives that this number occurs in non-randomly fashion in today's stock market. Well tough to beleive that..... but if you implement a mass socio-economic tag or mass psychology tag then suddenly the theory becomes a hot property.

The theory is taught in many financial institutions as non-technical mass psychology theory so that traders can keep them selves ahead of the market....
lets put this theory to test I have taken a 5 year period of BSE : sensex and compared it witht he elliotwave thoery, okay to be precise i am comparing a "cycle"

WIKIPEDIA REFERENCE

The classification of a wave at any particular degree can vary, though practitioners generally agree on the standard order of degrees (approximate durations given):

* Grand supercycle: multi-century

* Supercycle: multi-decade (about 40-70 years)

* Cycle: one year to several years (or even several decades under an Elliott Extension)

* Primary: a few months to a couple of years

* Intermediate: weeks to months

* Minor: weeks

* Minute: days

* Minuette: hours

* Subminuette: minutes
 

ELLIOT WAVE



 BOMBAY STOCK EXCHANGE APR 04-APR09

 



Halleluajh !!!  wooow this thinge fits like a glove !!!!! in the five year spread...  this means that we are giong to see one more drop  Or below is the end of wave... although i must admit that i have chosen random interval of the uptick and down tick wave .... its like i am biasing the data to fit the model .... but over all first impression not bad... but i wont stop the autopsy .... too vage

                    

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Reserve Bank of India reduces its intrest rates

Indian Reserve Bank of India cut its lending rate by 25 basis points i.e. 0.25%
repo rate has been cut to 4.75 per cent from the existing 5 per
cent while the reverse repo has been cut to 3.25 per cent from the existing 3.5 per cent.RBI cuts interest rates by 25 bps LINK

Other headlines
RBI on a shopping spree for oil bonds


RBI to upgrade regulations to deal with menace of tax havens

A recent study indicates people from Indian Subcontinent have stashed more than 150billion $ in overseas places like, lichenstein, Mauritius, Switzerland etc .... U.S has started a crack down lets c what Indian regulators do about it

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Cricket Under The Clouds Of Terrorism

Few days back Srilankan cricket team visiting Pakistan's Lahore's Gaddaffi stadium came under heavy gunfire attack from 12 unidentified gunmen with Ak-47s , hand grenades and rocket launchers, say luck or god's grace  there was no fatality, although there were few injuries but were taken care off. This incident followed a huge tsunami of criticism against security provided by Pakistani security agencies. The English and Australian match offcials gave a startling  event description sending the Pakistan Cricket Board and its security agencies in to a tailspin. Many like me have a opinion that Srilanka in spite of warning going to prove a 'brave' point went to Pak was unnecessary in first place, and secondly the security was the culprit . Having said many of my friends disagree and consider a conflicting view point. Kartikeya Date in his blog writes :

" I haven't read a single angry reaction by any Sri Lankan cricketer to what happened in Lahore. Chris Broad and Simon Taufel on the other hand, have gone to town about how they were "left alone", even though people died trying to protect them ..."

The comments on his posts are really interesting and contradictory, however i respect his  opinion but would politely like to differ. Let me remind all of you that Kartikeya is  one of the leading cricket blogger in world, his credentials include his own cricket rating which i think is very balanced, and his unparalleled commentary on cricketing events taking place daily. Please visit and read his blog and do provide your point of view on the Pakistan cricket issue. 

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