Price n time (3)

This is a continuation of our series on looking at Price through Time Cycles.

In my last post made on Sept 3, I had called for the beginning of a new Intermediate term ( IT) cycle around the Sept 20th period noting that the then prevalent cycle had made it's max run and the lows would hold.

These were the observations :

"This current cycle has done 1020 points, which is the upper extreme for any cycle.

We feel the lows of the cycle will hold over the next 10-15 days by which the new IT cycle should begin.

For any up moves, 5123 spot will be the first Resistance line on daily closing basis, above which the market can attempt a gap fill  and go up to 5400 levels.


On the upper extreme, 5645 is the max the next cycle can stretch to" 

Let's look at the charts to see what happened

 

We are now in the third half cycle for the current IT, which should end in another  5 days and mark the center for the current term

The current  IT cycle should close out by the year end and as we are in the middle band as far as timing the cycle is concerned, there is no noticeable evidence of the cycle being left translated here.This clearly means that in the time span running into the year end the market has bigger chances of running up than down.

For the biggest bull out there, if you are trying to guess where the market will be by year end ( about 2 months) then the projection puts levels at 5754 very close to the 5654 I have projected earlier.

 However that is the max upside levels for the year and the market has to do a lot of work before it can even attempt to come closer.

Let's Look at a profile charts of the last IT cycle to understand where the volumes occurred.

It's now an open secret that the buying happened around the 5110 zone and it shows the biggest volumes.

But if you look at the profile on the left, you would notice the volumes around 5570 region which brought the market swiftly down the last time around.

Also the ovals ( in charts)  show the lack of volumes in the previous IT cycle in the current trading zone, which is a clear double distribution mechanism or a DD as we call it.

So there are 2 possibilities for the market over the next few weeks leading into the year end.

Possibility 1 : It auctions this low volume zone of the previous IT cycle and moves towards efficiency.

Possibility 2 : It gets attracted to the High volume zones at 5570 and above at 5650 , auctioning for a while in that zone before moving lower for the next IT cycle.

The stop loss for both cases would be the lower 5110 region.

Possibility 1 is our preferred scenario and would mean a consolidating market till the year end.Within this a break of the previous gap zone of 5240-5340 would set-up exciting possibilities.

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