Weekly Technical Analysis

22 July 2013

- By Vivek Patil, India's foremost expert in Elliot Wave Analysis

Post-Jun rally converts into a Complex Corrective, now testing 6-year long topping area [Technical readings carried forward from previous weeks are shown in italics. Readers can easily identify the new arguments which are written in regular font] Last week we discussed, faster retracement of e of Triangle confirmed breakout from the Triangle can achieve 75% to 100% ratio to its largest leg projected from the end-point of e 19578 & 19805 breakout implication was overshot by about 1% a faster drop below the 0-b line would be required to indicate that the Zigzag comprising c may be over According to NEoWave, a Zigzag is over when its 0-b line is violated and c-leg gets retraced in faster time monitor if the breadth and volume improve in the coming week in tune with the +ve bias Up 113 on Monday, overnight RBI action forced Sensex to plunge 421 pts on Tuesday. However, Tuesdays opening lows proved the lowest point of the week. Gradually recovering as much as 588 pts by Friday, Index finally ended 192 pts or nearly 1% higher for the week. Sector-wise performance was mixed. While FMCG/Oil&Gas/IT Indexes gained 4 to 7%, the Bank/Realty/Metal indexes lost 4 to 7% each. Also, the broader BSE Small-Cap and Mid-cap Indexes under-performed, and finished 0.5 to 1% th lower during the week. The action created the 4 consecutive Bull candle on the Weekly chart of Sensex.

The action on the broader indices, however, formed a Bear candle for the week. This resulted in overall breadth of the market being -ve for the week, as losers outnumbered gainers. Also, the volumes were only marginally higher. These could be taken as initial signs of distribution, as seen previously whenever Sensex moves above 20250 levels. During the last 5-6 years since 2008, whenever Sensex moved above the 20250 mark, movement developed into formation of a major top . Wed, therefore, look for further signs of maturity from hereon. As can be seen from the past, Sensex usually plays in & out around 20250 levels for few weeks. Even this year, as was shown on the chart below, Sensex has already reacted from 20250 levels twice, firstly in Jan and then in May.

Indeed, the chart given above also shows VPs 2450-point Grid System. Ever since 2008, these Grid levels have always provided important turning points for the Sensex. The only problem is that while Sensex is testing the highs of 20250 levels for the 3 time this year, the broader indices are way below their highest levels achieved during Jan13 . Indeed, while Sensex has been managed at higher levels with the help of ITC and few other heavies, the broader indices are now trading closer to their lowest levels of the year, indeed down nearly 20-25% from their highest levels of 2013. As was argued much earlier, this remains a selective market, not a secular one. It would remain so until the breadth improves and broader indices start improving their performances. Nevertheless, as far as Sensex is concerned, it is seen that dips are still bought into . The Index recovered quickly from Tuesdays 421-pt dip and action thereafter made a Higher High compared to previous week. This continues the +ve bias, at least for Sensex. The high of the week, i.e. 20257, is now very close to the highest level Sensex could achieve during the last 5-6 years. As commented above, since Jan2008, Sensex has always formed a major top whenever it reached 20250+ levels. Last weeks highs are also around the 80% retracement level to May-Jun fall. Several times in the past, 80% retracement level has proved crucial, the most recent instance being 80% retracement of Apr-May rally.
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Would Sensex would do something different this time ? Remember, History repeats is one of the 3 basic principles of Technical Analysis. We will keep a watch accordingly, as Sensex repeating its history cannot be ruled out. Structurally, we assumed a Zigzag development inside c from 26 Jun13. However, since the drop last Tuesday protected the 0-b line we showed, the drop is marked as x-wave. This modifies c to a Complex Corrective development. A Complex Corrective involves 2 or more correctives separated by an x-wave. Index bounced on Tuesday from 19650, which avoided overlap with the preceding Triangular b-wave. The Highest point of the Triangle, at 19640, was a crucial on downside as per NEoWave. The recovery from Tuesday onwards is, accordingly, marked as a-leg of the 2 th larger c from 26 Jun13.
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The 1 corrective consumed 13 days. The 2 corrective can shape up into some distribution pattern , perhaps forming as a Triangle, and consume about 8-13 days. So far, it has consumed only 3 days. Fridays action formed a Bear candle on the 3 day of rally (a-leg of 2 ). The bias would turn -ve on follow-up weakness and close below its bottom. The 30-minute chart shows a small Grey channel around the latest 3-day rally. This channel breaks on weakness below 20045 (Nifty 6000). Weakness below 20025 (6000) could mean the 3-day rally is over. Structurally, it would mean end of and leg, and opening of b-leg inside 2 corrective of c from Jun13 lows. As one may note, each segment of rally inside the up-move from 26 Jun13 (c) lasted exactly for 3 st days. Previously, both a-leg and c-leg of 1 corrective had lasted exactly 3 days. Since 26 Jun12, however, each rally has also shown reduced price-magnitude gradually. The 2 rally st st rd nd (c-leg of 1 corrective) was price-wise 75% of the 1 rally (a-leg). As at Fridays High, 3 rally (a-leg of 2 ) is nd 75% of 2 rally. Sensex added 1019 points in the last 8 days from 10 Jul (19238) to 19 Jul (20257). Over 90% of this came from ITC (277), Infy (185), RIL (180), TCS (159) and HUL (147), just 5 stocks. If you are not in these 5 stocks, you are more likely to be flat or -ve. Such a selective market calls for a selective approach, as we monitor if the market is indeed forming a major top nearby 20250, as it did many times in the past. However, we have been assuming a Triangle on one higher degree as well, i.e. from Apr13 lows. We also argued that Triangle provides exceptions to virtually all NEoWave rules. It was said that c from 26 Jun can be any corrective label-3 pattern. Currently we are assuming it to be a Complex Corrective. Overall, however, the size of c should remain smaller compared to b, in order to maintain Contracting Triangle shape of the larger pattern from Apr13 onwards, as was shown on the chart below :
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As shown on the chart above, on one higher degree, the Contracting Triangle from Apr13 is considered as b-wave inside the larger E (from Jan13). The E from Jan13 is assumed to be part of the larger Diametric from 2008 onwards, as shown on the chart below :

The market, in the meanwhile, continues to be selective. The main indices have been controlled by the ones who can move the heavyweights. We had mentioned swaying prowess of ITC recently, which created a Higher High on Sensex in May13, but not on broader Indices or Dollar-based Indices. Indeed, while Sensex traded near to its highest levels, the BSE Small-Cap Index traded near the levels it closed the year 2005, i.e. 8-year old levels, which shows the small investor still remains in a tight spot. Since legs of Diametric as well as Extracting Triangle formations are exceptions to NEoWave rules, the trading environment remains challenging. Under Wave Theory, the standard correctives are Zigzag, Flat and Triangle. Though not mentioned in Glenn Neelys Book Mastering Elliott, a 7-legged Diametric is also considered one complete label-3 corrective. A Diametric is a very tradable pattern once identified correctly , like we did from Feb13 to Apr13. Its identification symptoms included time-similarity amidst its internal legs, and sub-normal b-wave in response to label-3 pattern in a-wave. Since Diametric is absent from the book, many seem to ignore its existence. It is basically made-up of two Triangles. While Contracting Triangle followed by Expanding Triangle would shape-up as Bow-Tie Diametric, Expanding Triangle followed by Contracting Triangle would shape-up as Diamond-Shaped Diametric.

Multi-Year long Diametric Formation It was argued that all multi-fold rallies would be followed by multi-year long consolidations. Sensex, remember, rose 11-fold during 1988 to 1992, but entered a 11-year consolidation thereafter. Again, during 2003 to 2008 it multiplied 7 times. Drawing similarity, it could a 7 -year consolidation starting 2008. Further, the consolidation, may shape up like a 7-legged Diametric, similar to the consolidation seen from 1992 to 2003. The Diametric formation from 2008 is also suspected because each of its internal legs, except B, have consumed about 13 months so far. So, the E wave from Jan13 could also continue for about 13 months, and end somewhere around Feb-Mar14.

This long-term picture was fist published on 6 Feb2012, with both D legs highlighted in Purple color rectangles. In the previous instance, the D leg during 1996-97 had retraced as much as 97% of its preceding C leg. In the current instance, D retraced 84% of C. Long-term corrective phase on Dows chart from the year '2000 onwards also appears to be a probable 7-legged Diametric. Instead of Bow-Tie Diametric on Sensex, Dows Diametric is shaping up as Diamond-Shaped Diametric.

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Jan-Mar Topping Cycle During Dec12, it was pointed out that major tops occurred during Jan-Mar period in the last 13 years. More than half the times, the top also occurred during the month of January . Based on this, it was argued that Sensex could hit a major top during Jan13, and it did. Substantial damage was, however, seen mainly in the broader market.

This cycle may be the result of NAV pop-up exercise in the last month of the Calendar Year. Jan13 was the th 7 such top forming in the month of Jan.

Performance of the Broader Market The broader market has, generally, under-performed the main Index since the year 2008, as can be checked on the chart below.

Indeed, the broader Mid-Cap and Small-Cap Indices have also broken 0-b lines (Red color lines) of the upward D leg. The Small-cap Index even broke its Jun12 levels, and gave a faster retracement to the c part of post-Dec11 rally. Indeed, while the Sensex itself retraced 89% of it preceding 13-month fall from Nov10 to Dec11, BSE Small-Cap Index retraced only 38.2%, and has, in fact, reacted heavily from this retracement level. The divergence between Sensex and broader market appears to be Index management activity, as the Sensex is held by the Index heavy-weights, while the broader shows distribution. This whole thing, however, made for a tricky and uncomfortable trading environment.

NEoWave Discussions Inside the D leg from Dec11 to Jan13, we had had assumed a 3-legged a-b-c Flat. The c part was a 5th legged Impulse, inside which, 5 leg (beginning Nov12) was assumed to be a Terminal. Based on NEoWave requirements, it was argued that Sensex would drop below Nov12 lows in 50% time of the 48-day long Terminal. Index eventually did drop below Nov12, but took 48 day or 100% time (instead of 50%). As an abundant precaution, therefore, following alternate wave-structure was suggested for the D leg from Dec11.

In the alternate scenario, c ended at Oct12 high, and it was equal to a leg. The d was the smallest segment, and e (i.e. post-Nov12 rally) was a Double Combination which ended in Jan13. The post-Nov12 rally is retraced by 100% on Sensex, but more than 100% on broader indices. The larger picture of Diametric from 2008 onwards is, therefore, considered probable. That would mean 13-month long D-leg has ended at Jan13 highs, and 13-month long E-leg started thereafter. NEoWave, remember, allows exceptions to rules at important market turning points or under unusual conditions, like end of larger patterns or last wave, such as a Terminal. Also, Triangles and Terminals are exceptions to virtually all rules. Since Diametric pattern is made up of Triangles, NEoWave Exception Rule is also applicable to these patterns . Since we were at an important turning point in Jan13, and dealing with Terminal and legs of Diametric, perhaps pattern implication rules could not be satisfied to the full extent. Does it really matter whether the Sensex achieves the pattern implication accurately within the timeprice parameters, when the general direction of the secular market has been largely -ve as we suspected since Dec12 ? As we argued, the larger bear phase is already visible in the broader market. Since Dec12 we turned cautious as the rallies were getting smaller (shaping into a Terminal), and also because of the Jan -topping

cycle (discussed separately). Terminal we assumed from Nov12 to Jan13, is a special kind of Impulse which occurs in the last th wave position, i.e. either as c of Flat/Zigzag or 5 of an Impulse. Its internal structure is made up as 3-3-33-3, instead of usual 5-3-5-3-5. In other words, each leg of a Terminal would develop as a 3-legged or 5-legged corrective structure, th nd like a Flat, Zigzag or Triangle. Also, 4 of Terminal must enter the area covered by the 2 (Overlap Rule). A line similar to the 2-4 line on Sensex can also be drawn on the broader indices, and the same has been broken (as discussed separately). Sensex, consumed 59 weeks to retrace 84% of its preceding 13-month fall, which also was a 59-week affair, as shown on the chart below :

The rally, accordingly, was considered slower, corrective structure as per NEoWave, and not as part of any fresh rally. The channel enclosing the a-b-c Flat inside the larger D leg from Dec2011 onwards was shown on the chart below :

The 80% retracement level was considered and marked as a pattern implication for the 13-month long Double Combination move marked as C. Pattern implications, however, cannot be strictly enforced for the legs of Triangle and Diametric, which are exceptions to the general rules. As per NEoWave, most channeled moves enclose a Complex Corrective structure involving x wave. Complex Corrective involving 2 correctives, joined by one x wave, is called a Double Combination, and carries a pattern implication of not more than about 80%. Note that the C leg of Sensex, from Nov10 to Dec11, was a Double Combination, with two equal -sized correctives (see weekly chart given above), and therefore, carried a pattern implication of 80% retracement by the D leg. Further, as depicted on the chart below, since Nov10, it has been generally useful to consider 61.8% to 80% retracement area as crucial for terminating moves.

As per Wave Theory, Flat is a 3-legged corrective pattern marked as a-b-c, where b corrects more than 61.8% of a. It is also a 3-3-5 pattern where a and b carry corrective label of :3, and c is an impulse label of :5. Around a Flat, we usually draw a line joining 0 and b (0-b line), and take a parallel from the a point. The c leg should normally end near such parallel. The channel indicates similarity of its 3 internal legs, reason why Flats are called Flats. Inside c of D (beginning Jun12) for Sensex, we were expecting a 5-legged Impulse, because Flat is a 3-3-5 structure. As per NEoWave Extension rule, one of the directional leg inside an Impulse should get extended, i.e. achieve 161.8% ratio to the next largest leg. Since 1 and 3 were normal, we could have projected 5 wave Extension. However, such a move would project values slightly above the Nov10 highs, which would jeopardize the larger assumption of Bow -Tie shaped Diametric from 2008 onwards. We, therefore, preferred 5 of c not to achieve 161.8% ratio, but terminate below Nov10 highs, from where a downward E would open. Since E begins the expanding phase of the Bow-Tie Diametric, it would break below Dec11 lows. The 1 and 3 inside c of D continued for about 4-5 weeks each. We expected 5 to consume a similar time, and end somewhere in the month of Dec12 or near to it.
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As the beginning part of 5 shows violence on upside, we suspected 5 could develop internally as a st 1 Extension Impulse or Terminal. Since a Terminal always occurs at major turning point, it would be able to generate the necessary downside power for the larger E leg. In the 7-legged Bow-Tie shaped Diametric from 2008, one can see a reduction in magnitude from A leg to D leg. The D leg is the smallest segment of the Bow-Tie shaped Diametric. The other half of this Diametric, i.e. E-F-G legs, should show expanding magnitudes, and therefore, E should become larger than the D leg. This can happen only when E breaks the bottom Dec2011. After breaking the 13-month long channeled C (from Nov10 to Dec11), we had suspected that development post Dec11 has potential only to be marked as D leg of a much larger Triangle or Diametric from 2008. This option was preferable because C leg from Nov10 was not an Impulse. A Non-impulsive C leg could only be part of a larger Triangle or Diametric.

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BSE Dollex-30 Index Meanwhile, since the FII activity turned a prominent factor in the Indian stock market, we examined the development of BSE Dollex-30 Index, which showed a Head & Shoulders formation around Oct12 on its Daily chart. Its downsides later achieved the Head-to-Neckline projection on downside, as we expected. Since the projection level also matched with its 200-day EMA, we suspected some pull-back. It did pull back till Jan13. During Apr13, this Index protected its Nov12 lows, and bounced back. It has now reacted lower from the 80% retracement level to Jan-Apr fall, and has now below the crucial 200-day EMA once again.

From one higher-degree perspective, the Oct12 formation looks like the Left Shoulder of a bigger Head & Shoulders formation, with Jan13 as its Head. The top during May13 looks like the Right Shoulder of the bigger H&S formation, the Neckline of which, is now broken. The recent pull-backs are seen testing the Neckline for the second time.

Yearly lows Sensex has broken 2010 low of 15652, and now in 2012 is found holding the 2011 low of 15136. As the past instances would show, once the yearly low gets broken, a minimum of 20% cut from the low has been a usual phenomenon, though gradually. A 20% magnitude reduced from 15652 would calculate to about 12500 for Sensex. This level has not been touched so far, but should be remembered as a crucial level which matches with the huge gap-up action (refer to the Weekly chart discussing 32-week cycle) seen during the 2009.

32-Week time cycle The development since Mar09 has followed a 32-week time cycle, as shown on the chart below.

This was used for raising a possibility that an important low would be formed around 20 Aug11. th Sensex responded by hitting the bottom on 26 Aug. This cycle had also raised the possibility of an upward/sideways phase that could survive for 32 th st weeks from Aug11, and end either on 4 Feb12 or 31 Mar12, developing as a ranged movement like the Left Shoulder. The upward phase ended during Feb12 as per this cycle. Going by the structural possibilities from this cycle, it was suspected that Sensex could be forming an e leg of a possible Extracting Triangle, which would remain smaller than the c leg. The e leg did remain smaller as suspected. As we already know, Extracting Triangle is a pattern which shows smaller rallies and bigger drops. Thus in one direction, it shows e < c < a, and in the opposite direction, it shows d > b. Above 18000, Right Shoulder became bigger that the Left Shoulder, which appeared rejecting the Head & shoulders or Extracting Triangle argument. However, the 32-week time cycle may remain valid as a cycle even from here. The Sensex was seen testing the Neckline shown on the chart, which did prove crucial, as Sensex bounced several times from the Neckline. Another idea would be to mark the entire development as a Diametric, instead of Extracting Triangle, and the same is now marked on the chart. These assumptions indicate an incomplete B, but confirms only on faster drop below the Neckline, which is still awaited.

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Recent recovery happens to be exactly at 32-week cycle turning point.

30% Principle All major tops are characterized by 30% drop from the top value. This is normal not only inside a bear phase, but is commonly seen even inside a bull phase too. The 30% taken out from the current top value on Sensex (21109) would be less than 14800. The total loss so far, from the high of 21109 to 15425, measures around 28% so far . However, on BSE Small-Cap and MidCap Index, the loss from 2010 high does measure more than 30% . Overall, it was argued much earlier, that we would see a topping formation spread over 2-3 month period beginning Oct10. This played out well as suspected. Indeed, as was observed, 60% of stocks topped out during Oct10 itself, and many have already shaved off much more than 30%, though Sensex itself shaved off only 28%.

Comparison with Jan'08 top formation We compared the 2010 topping formation to the movement from Oct07 to Jan08 , a 2.5 month period just before the high of 21206 was hit on Sensex. This was also an extremely volatile period of nearly two

months, just before the market actually topped out. The following chart of 2008 period shows two equidistant parallel channels. The Sensex broke above the original channel and achieved an equidistant height at the upper parallel, before reacting lower into a bear phase. One may observe the volatile development once it reached closer to the upper parallel. Inside this volatility, th the market faced number of sell-offs beginning Oct07, before it finally topped on 8 Jan08.

A similarity can be drawn for the 2010 top formation with the developments of 2008, as shown below.

2450-point Grid chart for the Sensex Sensex has been following a Grid of 2450-2500 points since 2008. These Grids are shown on the Weekly chart of Sensex below. One can find a bottom or a top getting formed at each of the Grid levels. Index is now reacting from the Grid level at 20250.

The larger picture Our markets, remember, has seen multifold rallies previously, each time continuing for about 4 (four) years, after which, it usually enters a multi-year consolidation phase. In other words, long-term has always meant 4 years in Indian context. Remember, Sensex rallied 11-fold from 390 (Mar88) to 4546 (Apr92) in four years, after which it consolidated for 11 years from 1992 to 2003. In 2008, it completed another 4-year rally from 2003, during which Sensex rose 7-fold from 3000 levels to 21000. It may now consolidate for 7 year, beginning 2008, preferably forming as a Triangle or Diametric. We explained that the 14-month fall from Jan08 was a Triple Combination A leg of a large multi -year consolidation. The corrective phase beginning Mar09 retraced about 99% of the previous fall from 21206 (Jan09) to 8867 (Mar09), (which was labeled as a T riple Combination). The longer time required while rallying is symptomatic of its corrective label of B. The rally from 8047 (actually beginning at 8867) was, therefore, considered as the B leg. The next leg downwards would be labeled as C. Such a-b-c development since Jan08 would be considered nd part of the 2 wave of what appears as a probable Terminal beginning 2003. Even though we saw the market reaching levels above Jan08 highs, the multi -year consolidation is

expected to shape up like a large decade-long Diametric, looking similar to the consolidation we saw from 1992 to 2003. Our trading/investment strategies should be designed accordingly. The suspected corrective phase beginning Jan08 would be the 2 wave within the larger 5 wave. th This 5 wave is suspected to be forming as a Terminal due to absence of impulsive behavior in its st internal 1 wave. The Terminal confirms when the Sensex drops below the 2-4 line of one higher degree. One may see the Yearly chart in Appendix, which shows the 2-4 line and its values for the next three years. Remember, Terminal development usually violates the 2-4 line. The Sensex is assumed to be under the influence of a large 8-year cycle ever since its birth. As shown on the chart below, '1984 was the beginning of 8-year long bull-run till '1992. In our Super-Cycle Degree count, shown on ASA Long-Term chart under a separate paragraph, weve considered 1984 as the beginning point for the most dynamic 3rd wave. The next two important turning points occurred exactly 8 years thereafter, in '1992 and '2000. Both these turning points were marked by stock market scams, because of which, the leaders of the rally had extremely difficult time later. For example, ACC, the leading stock of '1992 bull market, remained below its highs till end of '2004. Similarly, the IT stocks, which were leaders of '2000 rally, lost as much as 90% of their top valuations by the year '2003. During 2008, we were sitting on this very important cycle, which therefore, threw up similar possibilities. In the previous 8-year cycle top during 1992, Sensex lost 57% from 4546 to 1980. In the next cycle top, the cut was almost 58% from 6150 in 2000 to 2594 in 2001 . We had, accordingly, targeted sub-10k levels for Sensex price-wise during 2008-09, and a minimum of 13 months into bear phase, time-wise. The price-time targets were achieved as Sensex dropped 63% from 21206 to 7697. The yearly channel, shown below, which was used earlier to project 20000 level for the Sensex during 2007, was broken when the Index moved below 17200. Break of this long-term channel also weighed in favor of a larger corrective phase following this 8-year cycle.
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Appendix : Super-Cycle-degree Wave-scenarios for Sensex For 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).

The wave-count presented shows that the market is into the lower-degree 5th of the SC-degree 3 or 5 wave.

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The 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 rd th Impulse is a Super-cycle-degree 3 or 5 .

Super-Cycle-Degree 3 (or 5 ) began since Nov84. Its internal 3 was an extended leg, which achieved st th exactly 261.8% ratio to the 1 on log scale. The Sensex is now forming the 5 Wave, and the same could st develop as a Terminal, because its lower-degree 1 wave from May03 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 261.8% time-wise. While the 4 is shown as a 3-legged a-b-c Flat on the monthly chart above. Alternatively, the 4 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.
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. As mentioned above, the lower-degree 1 from May2003 to Jan2008 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. The Diametric development from 2003 to 2008 is considered to be the 1st wave of the Impuse. Due to the st th corrective structure in the 1 leg, the higher-degree 5 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 beginning 2008.
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As per NEoWave, break of 2-4 line confirms a Terminal development, and If the 5 proves to be a Terminal, rd th th rd the Super-Cycle-degree label of 3 will have to change to 5 , because only a 5 of a 3 cannot be a th th st nd Terminal. Only a 5 of the 5 can be a Terminal. The Super-Cycle-Degree marking for 1 and 2 as shown rd th on ASA long-term chart, would then change to 3 and 4 respectively.

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Disclaimer : These notes/comments have been prepared solely to educate those who are interested in the useful applicatio Technical Analysis. While due care has been taken in preparing these notes/comments, no responsibility can be or is assu any consequences resulting out of acting on the