readings carried forward from previous weeks are shown in
can easily identify the new arguments which are written in regular
Last week we discussed,
“We labeled this fall as
lower-degree b-leg inside ‘g’, expected b-leg to remain ‘smaller’ than a-leg, i.e. to hold the
gap-up area of 14th March … initial
sign that b-leg may be over and upward c-leg is opening will
require Index to close above previous day, which should later
be followed up with breaking of the falling channel enclosing
b-leg … upward c-leg
could retrace ‘minimum’ 50% of b-leg … ”
Sensex closed above previous Friday’s high on the very first day
the week. The
move also broke the falling channel enclosing b-leg. Thus
confirming an upward c-leg, Sensex was up by a hefty 819 pts by
Thursday morning. Reacting 266 pts on Thursday & Friday,
it finally settled 553 pts or 1.9% higher, forming a sizable Bull
candle for the week. Except IT/Pharma, most other sectors ended
flat to +ve. Indeed, the Auto/Banks Indexes gained as much as 4%. Sensex
itself hit a new all-time high at 30185, against its previous
‘2015 record high of 30025.
We suspected b-leg would
remain “smaller” than a-leg, and therefore, end inside the
gap-up area of 14th March. The
b-leg did finish off with a Double Bottom kind of action inside
the gap-up area, and upward c-leg opened as expected.
We expected upward c-leg to open anytime because b-leg was
“slower” compared to a-leg, consumed leisurely 11 days against
6-day long a-leg. Further, the Oscillator shown on the initial
Daily chart of Sensex was into “oversold” zone at the end of
Remember, since Dec’16, Index was seen maintaining “higher”
bottoms (as well as higher tops), which defines an UP-trend as
per Dow Theory. In an
existing UP-trend, all dips should attract buying, and this
contention confirmed last week once again.
As long as Index does maintain “higher top higher bottom”,
and avoids faster retracement of rallies, the UP-trend should
continue. However, since
“g” is the last leg of post-Dec’16 rally, we had turned
Remember, we had
suspected that the larger “g” was forming as a Triangle.
In accordance with this, the upward c-leg
should have remained “smaller” than the b-leg.
Going against this, however, the c-leg turned out to be
“bigger” than the b-leg. And therefore, the
Triangle we suspected inside “g” stands rejected.
We, remember, had raised the possibility of Triangle inside
“g” because the d-f base-line was broken by the “g” leg
(or the last leg of the post-Dec16 Diametric).
However, market can go beyond logic of rules when it is
forming a major top. This is covered under NEoWave “Exception
Rule”. Our a-b-c labels
inside “g” remain unchanged. But, since the c-leg turned
“bigger” than b-leg, the formation inside “g” now looks
like a “Flat”.
As per NEoWave, Flat
is a 3-legged pattern wherein b-leg retraces “more than” 61.8%
of a-leg, and c-leg achieves near-equality with its a-leg.
Last week’s up-move (c-leg) did indeed achieve
“near-equality” with the a-leg.
Now the question is whether the Flat inside “g” is completed
last week. To conclude that, we’ll require Index to break 0-b
line of the Flat, as shown on the chart below, as a 1st
stage confirmation, and complete retracement of c-leg, as the 2nd
stage confirmation, both to happen in “faster” time.
As can be seen on the initial Daily chart, after last
week’s rally (c-leg), the Daily
Oscillator is into “overbought” zone. Indeed, as can be
seen on the following chart, MACD/KST like oscillators are now showing -ve divergence with price,
which can turn out to be a -ve sign.
a -ve divergence is defined
when the price hits “higher” highs, but the oscillators hit a
Despite this, and despite Index
reaching within tolerance area to our target of 30500 (Nifty
9400), and PE touching “Bubble Territory”, Index still
maintains “higher top higher bottom” formation since Dec’16,
which defines an UP-trend as per Dow Theory.
Dow Theory, remember, is the most successful chart reading method
in the entire history of Technical Analysis. Change
to DOWN-trend will happen when we actually see a first set of
“lower top lower bottom”.
Index is not only maintaining an UP trend, but is also seen
retracing the “falling” segments in “faster” time. The
6-7 days long “b” & “d” legs were retraced in 2 days.
The 6-day long “f” leg was retraced in 5, and the 11-day long
b-leg of “g” was retraced in 3.
By NEoWave, completion of upward structure will be “suspected”
when the rallying segments start getting retraced in faster time,
and this is yet to happen.
Under the circumstances, for us to
begin exploring -ve options, we require the current pause from the
end of last week to stretch beyond 2-3 days. Else, we cannot rule
out +ve efforts.
As can be seen on the initial Daily chart, Index
showed a huge gap-up action last Tuesday, which can be a crucial
support for the coming week to watch. +ve options can open if
the -ve bias remains restricted to 2-3 days, and preferably holds
this gap-up area.
In case we see Index resume the rally after restricting the pause
as discussed, then we may consider the following alternate
This structure considers recent bottom as an “x-wave”, and
last week’s rally as “a” of 2nd Corrective, which
can form into a Triangle or Diametric.
Looking at the time of 1-3 months market spends even inside the
Bubble Territory, we had advised a “selective” approach for the time being. Select
stocks, especially in the broader market, continue to provide
opportunities, as argued.
Market generally remains into the Bubble Territory for 1-4 months.
year, we used this concept
to identify a major top during Sep’16, when the PE Ratio had
entered the Bubble Territory. As can be seen on the chart, the PE
Ratio later came down to 21.16 by Dec’16. The Sensex itself lost
about 12%, and many individual stocks saw a larger damage.
Index is still forming a higher top higher bottom,
which defines an UP trend according to Dow Theory.
the State Poll results, Sensex
was able to cross the ‘2016 high with a gap-up action on 14th
March. And it is still holding that gap-up area. As of now,
this looks like a +ve sign.
As per NEoWave, Diametric
is a 7-legged pattern, marked internally as a-b-c-d-e-f-g.
Diametric possibility is suspected when both Directional
(rising) as well as Non-Directional (Corrective) legs are
“similar” either in terms of price or in time.
Inside an upward
Diametric development, the a-c-e-g
are Directional legs, and b-d-f
are Non-Directional legs.
mentioned on the 3rd chart of this report, all
Directional legs were similar in Price, about 1525 to 1725 pts
each. And, all Non-Directional legs were similar in Time, about 6-7 days each.
Projecting price similarity
would take Sensex closer to our upside target of 30500 (Nifty
target, remember, we had calculated much earlier, and the same was
based upon 75% pattern
implication for breakout from the 21-month Neutral Triangle we
showed on the chart above.
faster downside retracement of the last rising leg inside “g”,
followed by decisive break below the bottom of “f” leg at
28716 (Nifty 8860), would be required to end the larger rally from
Dec’16 as a Diametric.
Due to lack of
“standard” correctives inside the rally, we
suspected that the rally could be a 7-legged Running Diametric
pattern, marked internally as a-b-c-d-e-f-g.
Index is into the last leg of an upward pattern, further buying
should be selective with limited perspective. Also, we
should be looking for signs of maturity. Such a maturity would
suggest not only end of “g” leg, but also end of the larger
Diametric from Dec’16.
on the history of tops, we also observed that major
tops are generally made in the 1st quarter of a
Calendar Year. The fact can be checked on the following chart
which shows that except during ‘2006 and ‘2016, all major tops
were indeed made in the 1st Quarter.
highs are already inside “tolerance” allowed under NEoWave to
our targets at 30500 (Nifty 9500).
target, remember, was based on the pattern implication for
breakout from a 21-month Neutral Triangle from Mar’15 to
Dec’16 we showed on the chart below :
Since Dec’16, all bottoms
have been higher, and all tops have also been higher. We argued
that “higher top higher
bottom” defines an UP-trend, and all dips
would only provide “buy on dips” opportunities.
Due to the
substandard “b” leg, we had assumed
the rally may be forming as a 7-legged “Diamond-Shaped”
Diametric, marked internally as a-b-c-d-e-f-g.
Terminal & Diametric patterns are special patterns, exceptions
to virtually all NEoWave Rules, and therefore, perfect application
of rules can only be desired.
from Dec’16 had already crossed the 61.8% retracement level
to the preceding fall from Sep’16 to Dec’16. The
rally, therefore, was considered as a new up-move, the final
confirmation of which required “faster” retracement of the
preceding fall from
Sep’16 to Dec’16.
NEoWave, faster retracement of the last segment of a structure
confirms that the structure is complete,
and another structure in an opposite direction, i.e. upwards, has
pattern implication for the move out of a Neutral Triangle would
75% of its largest leg. Since “D” was its largest leg, we
calculated 30500 (Nifty 9500), or a new high, as the upside
Earlier on 30th
Sep’16, we projected
“E” leg to go down and end near 25000-500 (Nifty 7700-7800)
levels during Dec’16. News about Trump victory and
Demonetization came later, during Nov’16, and it only helped
“E” to move closer to our downside target.
leg ended at 25718 (Nifty 7894) exactly in Dec’16. While the
time target came through perfectly, price-wise we considered it to
be inside 1-3% tolerance level allowed under NEoWave. We,
accordingly, turned +ve from Dec’16 onwards.
can be seen on the following chart, Index showed a “Double
Bottom” during Nov-Dec’16 and later achieved its upward projection based on the “height” of
flattening for 2 months, as we had argued for, the
200-day EMA has now turned +ve, and indeed provided support for
the “b” leg dip during Jan’17. Index
also crossed the 61.8% mark to preceding fall to suggest the rally
could be a new up-move.
Index has reversed after achieving downside
technical targets, time-wise (Dec’16) as well as price-wise
Here we take the opportunity to highlight
the importance of Technical Analysis, especially the NEoWave
Analysis, in forecasting the market action. Fundamentally-oriented
players found it difficult to turn +ve after Trump victory and
Index showed a Head
& Shoulders formation at its Sep’16 top, and our downside target also achieved the downside projected on the basis of
its “height” of the H&S formation.
came down to 25718 (Nifty 7894) in Nov-Dec’16, which was inside
1-3% tolerance level allowed under NEoWave, We,
therefore, turned +ve and opened upsides with crucial upside at
61.8% retracement level at about 27800 (Nifty 8560).
As we mentioned, the
61.8% level was also close to (1) “Neckline” of the Head &
shoulders formation (2) “Double Bottom” height projection and
(3) “Turbulence” area of 9-11 Nov’16 on Trump victory &
wondered if the rally would be a new up-move OR just an x-wave.
To decide on this, we
considered 61.8% levels as crucial.
made during Nov-Dec’16 were similar, i.e. 25718 & 25754
(7916 & 7894 on Nifty), and therefore, they
looked like a “Double Bottom”, which is a reversal
formation as per conventional Technical Analysis.
The high between
these 2 bottoms, i.e. high of 9th Dec at 26804 (Nifty
8275), was crossed in Jan’16, which is a conventional method to
confirm a “Double Bottom”. The
height of such a Double Bottom can be projected as possible
upside, and same would also calculate to levels similar to 27800
(Nifty 8560), close to the 61.8% level marked on the charts.
level is also close to Neckline of Head & Shoulder formation
we had marked as Sep’16 top reversal formation. Index,
remember, broke this Neckline in Nov’16, and achieved downside
projected on the basis of height of the H&S formation.
level is also close to the high of 10th Nov’16 at
27743 (Nifty 8598), where Index went into a huge “Turmoil”
immediately after the Trump Victory and Demonetization.
Remember, Index lost 1685 pts overnight on these news flows,
recovered 1835 pts by 10th Nov, only to drop to a new
On one higher
degree, the post Sep’16
fall was marked as “E” leg of the Neutral Triangle from
Mar’15. We said that “E”
leg of Neutral Triangle usually achieves similarity with its
“A” leg. Such equality projected the possibility that “E” could end in Dec’16 at
leg of the Neutral Triangle was from Mar’15 to Jun’15, which
measured about 3700 Sensex points in 3 months. The “E”
leg measured about 3400 pts in 3 months (from Sep’16 to
Dec’16), and thus satisfied the requirements of similarity with
we showed on the chart below, all corrective phases in Indian market consumed about 13 or 21 months,
both of which are Fibonacci Numbers. Dec’16 was the 21st month from Mar’15. Thus, the
larger corrective phase may have ended as a Neutral Triangle in 21
we raised the question if the Corrective phase is now over, and
whether a new up-move has indeed opened from Dec’16
bottom. If it is a new
up-move, then Index should move to new all-time highs above
Mar’16 high of 30025 (Nifty 9119).
We had shown the Yearly
trajectory for Sensex on the following chart, and said the
lower trajectory line which joins the low of ‘2012 and ‘2013,
was valued at 29000 for the
We also said that the lower trajectory line would be definitely
broken as we begin trading for the new year ‘2017.
We, however, wondered if this break would lead to disastrous
consequences like it did after breaking lower trajectory line in
‘1995 and ‘2008.
At this point, we are only
raising the technical concerns and not drawing any conclusions.
Currently, Sensex testing the “Pull-Back” level of the Yearly
Trajectory we showed at 29000.
Neutral Triangle is a
5-legged pattern with an Extended “C” leg. Its “A” and
“E” leg usually tend towards price-time equality. Since
“A” measured about 3750 pts in 3 months, we
projected “E” to end near 25000-500 by Dec’16, to
achieve time-price equality with “A”.
NEoWave believes all
chart actions are explained as pattern implication of preceding
pattern. This, accordingly, called for re-arrangement
of our previous structural assumptions, in order to “explain”
or “justify” last Wednesday’s huge fall.
of larger “D” leg rally from Feb’16 onwards has been shifted
backwards to 22nd Sep’16 high of 28872 (Nifty
8893). As a result, the end-point
of 3rd Corrective inside “D” also stands shifted to
the same point.
this point, the 3rd
of “D” stands completed either as 5-legged Extracting Triangle
(as shown on the Daily chart) OR as 7-legged Diamond-Shaped
leg of our ET formed as an Irregular-B C-Failure Flat. As per
C-Failure Flat has larger pattern implication compared to a normal
Flat. The “irregular” nature, or “larger” size of its
lower-degree b, and the failure of c to move above a, together
indicates a larger downward pressure compared to a Normal Flat.
Indeed, as per
implication of Irregular-B C-Failure flat is minimum 161.8%
magnitude of b, to be projected from the end-point of c.
Further, this pattern
implication is to be achieved within the time consumed by such a
As can be seen on
the chart below, lower-degree
b measured 990 pts from 28478 to 27488. A 161.8% ratio of this would be 1602 pts. Reducing 1602 from end-point of c at 28257 would project 26655. This
projection was achieved within the required time, as shown.
“c” leg of ET was a
Zigzag, and its lower-degree b was also an Irregular-B C-Failure
Flat. As shown on the following chart, its pattern implication
was achieved by the fall :
also warned of maturity because the Nifty PE Ratio was into a
“Bubble Territory” above 23.50, as was shown on the chart
Neutral Triangle, however, is a missing variation of Triangle under
Orthodox Wave Theory.
Contracting Triangle is like 1st Extension Impulse, and
Expanding Triangle is like 5th Extension Impulse, then
Neutral Triangle would be likened to 3rd Extension
Triangle, a discovery under NEoWave, is a 5-legged pattern, just
like any other Triangle, but its c-leg is biggest (like 3rd
Extension), and a-leg and e-leg tend towards equality.
Observe the 2-year cycle of
tops and bottoms on the Monthly chart of Sensex shown below.
Since 1980’s, this cycle shows Index turning every alternate
a year ago, we showed performance of Sensex post elections on the
chart given below. As shown on the chart, Sensex’ performance always remained subdued after non-Congress Govt
Sensex was also testing the crucial Monthly Base line we showed on
the following chart, and the same has been broken.
Post-Feb’16 rally looks like a “pull-back” to the broken
line, from where Index is currently reacting lower.
to ‘2013, there were two major corrective phases,
first during Jan’08 to Mar’09 and second Nov’10 to Dec’11,
and both lasted for 13 months, another Fibonacci Number.
on these historical numbers for major corrective phases time-wise,
it is possible that if the
current phase stretches beyond Nov’15, i.e. 8 months, then it
can extend to Apr’16, i.e. continue for 13 months.
time FIIs sold out was during Oct’07 to Mar’09, when the Index
shaved off as much as 63%. FIIs invested Rs.612000 crs after
Mar’09, but Dollex-30 showed un-impressive gains during this
period, as it is still below its ‘2008 highs.
We also pointed out that market has seen major corrections or
profit-booking modes every 2 years ever since ‘2004.
Except during ‘2013, when Sensex corrected only 13%, all other
corrections saw cuts of either 25-35% (like during ‘2004,
‘2006 and ‘2010) or 50-60% (like during ‘2008).
The last major profit-booking was during ‘2013, and in ‘2015, 2-year cycle of profit-booking was due.
have been cautioning investors since the beginning of ‘2015
also because Index had
achieved breakout implication of 5-year Ascending Triangle
from ‘2008 to ‘2013, we showed on the following chart.
The largest leg of the Ascending Triangle was the fall of
‘2008-09, i.e. about 13000 Sensex points. As per NEoWave,
the normal thrust implication out of a Triangle is 100% of the largest leg of
From Aug’13, when the Ascending Triangle got over, Sensex has
moved up almost exactly 13000 pts from 17449 to 30025 :
Sensex top at 30K levels
was exactly the Grid level as per VP’s Grid Levels System (GLS),
which we have been using since last 5 years.
was also pointed out that Index
looked “overstretched” after rallying for 12 quarters, which
was a situation similar to major top of ‘2008.
readings carried forward from previous weeks
disparity between Sensex and broader market was shown on the
comparative chart below.
market outperformed Sensex from Nov’13 onwards, and its
out-performance was especially significant from 16th
May onwards, the day of Election Results, as can be seen on
considered post-Aug’13 development to be F leg of a larger
Diametric formation from ‘2008 onwards as shown on the chart
long-term scenario marking the larger Diametric was published on 6th
Feb’12. This Diametric assumption, as was argued, compared
well with the 11-year Diametric formation previously seen during
‘1992 to ‘2003.
As shown on the
chart above, F is the
“Expanding” leg of the 7-legged Diametric from ‘2008. In
the previous instance of the Diametric during ‘1992-’2003
period, F leg had hit new
highs during ‘2000.
other words, F leg of the diametric making new highs is nothing
new. After hitting new highs during ‘2000, G leg went down till
We argued for a
Diametric development from ‘2008 onwards because we observed
time-similarity within its legs, which is symptomatic of such a
pattern. So far, most of the legs, except B
D, have consumed exactly about 13
On the monthly Close-only chart given below, one can see Sensex
crossing previous highs, indeed taking their support for reaching
further newer highs for the F leg :
may watch if Sensex shows maturity signs at current levels and
considered this alternate scenario when Sensex moved above 2008-10
highs. It shows
corrective phase from ‘2008 completing as a 5-legged Ascending
Triangle. This scenario can open much higher targets, 30000+ for
30000+ target is nothing but 100% (+/- 25%) breakout implication
of the largest leg of the Triangle.
to NEoWave, corrective phase should consume more time than the
move it is correcting. After the 56-month rally from May‘2003 to Jan’2008, Sensex has
corrected for 67 month from Jan’2008 to Aug-13, i.e. a larger
period as required under NEoWave.
rule out that a sufficient
time-correction is required after any multi-fold rally. As
shown below, such time
correction can last for as much as 161.8% to 261.8% time ratio to
the multi-fold rally.
As for the last multi-fold rally during ‘1988 to ‘1992, its
correction lasted for 262.8% time ratio, from ‘1992 to ‘2003.
argued in favor of long term consolidation phase beginning ‘2008
because prior to ‘2008,
Sensex had multiplied 7 times from its ‘2003 lows. We
argued, such multi-fold
rally could results into a multi-year consolidation phase. Inside
such a phase, even moves reaching new highs are considered its
internal part, and not as breakouts.
we noted, after 11-fold rally during ‘1988 to ‘1992, Sensex
consolidated for 11 years till ‘2003 (261.8% time ratio). Within
this consolidation, Sensex corrected as much as 30-60% every time
it came closer to previous highs or even after hitting new highs.
ideal “suckers rally” usually involves making a New High.
As we can be seen on the
chart below, Sensex moved
higher than its ‘1992 highs during ‘1994 and ‘1997, but
reacted by over 30% both the times.
during ‘2000, it broke
1992/1994/1997 highs, by as much as 1500-1600, only to lose 58%
later. After a severe corrective phase lasting from ‘2000 to
‘2003, Index broke
‘2000 high during ‘2004 by 100 pts, but even then shaved off
30% before the next rally could take place.
All this happened because the 11-year long ‘1992-2003 phase was
a multi-year corrective phase correcting the preceding 11-fold
rally from ‘1988 to ‘1992.
the super-cycle degree, we
are considering a “Terminal” development since ‘2003 onwards.
The Terminal was suspected because its 1st wave from 2003-2008
was a label-3 “corrective” pattern. (As against a normal
label-5 Impulse pattern).
rally was internally marked as a corrective pattern called a
more importantly, it is only inside a Terminal that 2nd wave can be Triangle. (as
against this, in a normal Impulse, 2nd wave cannot
develop as a Triangle, only 4th can).
the circumstances, if our
assumed F leg continues beyond 13 months, i.e. beyond Jul-Aug of
this year, then we could be forced to consider the current up-move
as the 3rd of the Terminal Impulse, as per the Green
labels shown above.
basic NEoWave requirement is that such a corrective
phase should consume more time than the move it is correcting.
The ‘1992-2003 corrective
phase, remember, continued for a time-ratio of 261.8% to the
preceding 4-year rally from ‘1988 to ‘1992.
per Wave Theory, a
corrective phase shapes up as 3-legged Flat/Zigzag, 5-legged
Triangle or 7-legged Diametric (which basically combines 2
question, therefore, is whether the corrective phase ended as a
5-legged Triangle in Aug’13, OR it would continue for 2 more
legs and form as 7-legged Diametric.
was shown on the chart below, all the up-down legs from Jan’13 to Aug’13, except “b”, consumed
exactly 20-25 days,
and formed into a 7-legged Diametric (Diamond-Shaped variety).
per VP’s observational rules, all the legs, except “b”, of a
7-legged Diametric tend towards time-similarity.
Indeed, by reverse logic, when legs begin to be similar in time,
the structure is more likely to form as a Diametric.
to the pattern explained above, on one higher degree, we also
observed time-similarity from ‘2008. All the legs, except
“b”, consumed about 13 months since the year ‘2008.
question, now, remains if we continue with the Diametric
assumption or complete the post-‘2008 development as a 5-legged
Triangle. As we have been explaining, we
can open possibility of ending the phase as Triangle only if we
see strength continuing beyond Jul-Aug of this year.
market is being moved mainly on a/c of FII buying heavyweights
selectively, even as
many stocks have been trading near previous lows in the broader
related to Wave Labels so much on an immediate basis, VP’s
30% Principle shows that Sensex is at a risk of 25-30% cut every
2-3 years, ever since ‘2004, i.e. in the last 9-10 years.
this period, the 25-30% cut was seen from the tops in May’2004,
May’2006, Jan’2008 and Nov’10 so far.
The last bottom was during Dec’11.
: Super-Cycle-degree Wave-scenarios for Sensex
Super-Cycle-Degree wave-scenario, consider following ASA Long-Term
Index. This Index has been created by combining a very old Index
compiled by a British advisor (from '1938 to '1945), with RBI
Index ('1945 to '1969), F.E Index ('1969 to '1980) and Sensex
(thereafter till date).
wave-count presented shows that the market is into the
lower-degree 5th of the SC-degree 3rd or 5th
detailed wave-count from ‘1984 onwards can be seen on the
Monthly chart given below. The 2-4 line shown on the ASA long-term
Chart above, and Monthly chart below, would determine if the post
‘1984 Impulse is a Super-cycle-degree 3rd or 5th.
3rd (or 5th) began since Nov’84. Its
internal 3rd was an “extended” leg, which achieved
exactly 261.8% ratio to the 1st on log scale. The
Sensex is now forming the 5th Wave, and the same could
develop as a ”Terminal”, because its lower-degree 1st
wave from May’03 onwards developed as a Diametric (which is a
“corrective” structure, rather than an “impulse”). Within
the non-directional legs, 2nd was exactly 61.8% of 1st value-wise,
and 161.8% time-wise. The 4th was 38.2% of 3rd value-wise, and
While the 4th is shown as a 3-legged a-b-c Flat on the monthly
chart above. Alternatively, the 4th is shown as a
7-legged a-b-c-d-e-f-g Bow-Tie Diametric on the Monthly chart
below. The chart below also shows 11-year parallel channel from
Apr'1992 to May'2003. As shown, if one projects the width of this
channel on upper side, such a projection gave 20000 as the
“minimum” target. This forecast was achieved.
mentioned above, the lower-degree 1st from May’2003
to Jan’2008 appears to be a Bow-Tie Diametric, marked as
a-b-c-d-e-f-g. It is called "Diametric" because it
combines two Triangular patterns, one initially “Contracting”
up to the "d" leg, followed by an “Expanding” one. The
contraction point is the "d" leg, and the legs on either
sides of it tend to be equal. Accordingly, "c" and
"e" were equal in "log scale", both showing
about 60% gains. Similarly, "g" was equal to
"a", both showing about 115% gain.
Diametric development from ‘2003 to ‘2008 is considered to be
the 1st wave of the Impuse. Due to the corrective structure in the
1st leg, the higher-degree 5th could be
developing as a Terminal. Since ‘2008, we are into its 2nd wave,
which could continue to develop over a period of 7-8 years
per NEoWave, break of 2-4 line confirms a Terminal development,
and If the 5th proves to be a Terminal, the
Super-Cycle-degree label of 3rd will have to change to
5th, because only a 5th of a 3rd
cannot be a Terminal. Only a 5th of the 5th
can be a Terminal. The Super-Cycle-Degree marking for 1st
and 2nd as shown on ASA long-term chart, would then
change to 3rd and 4th respectively.