Hello Traders from the Middle East. So Dubai Stock index, or the DFM Index, has collapsed today, losing over 7%. Shocking, but the writing was on the wall all along. With the increase in rhetoric about Syria, we just needed a small push and it would have fallen over the cliff! When a move is approaching the end of its 5th wave, any informed investor would have sold off all his shares and waited for the inevitable correction to start. Elliott Wave Analysis of Dubai Stock Index shows that the 5th wave has indeed been completed. a fact that has become evident today, but something we should have anticipated. You can observe from the Elliott Wave charts attached that Dubai index had earlier seen an extended third wave. When you already have an extension in either the first wave or third wave, you should expect the fifth wave to be of normal proportions. Finally, by examining the sub waves of the fifth wave, you could have gotten out of most of your investments close to the top. This is shown in the last chart below. What is the outlook for Dubai Index from here? Well, there are mild supports at the fourth wave level within the just completed fifth wave.But expect any recovery to be mild and short lived. We should choose to exit on a pull back, waiting for the next bull market to be signaled by Elliott Waves sometime in the future.
This blog aims to teach traders how to use Elliott Wave analysis in their trading. A variety of markets are covered to demonstrate that the principle works just as well in any of them. Whether you are a short term trader, or a medium term investor, you will find that this approach will add considerable value to your bottom line. Everything in this blog is for free. Every chart presented was done with a forward looking approach. Wave Times is different because I make no pretense that I know it all. However, I do know that a trader can make sensible trading decisions by using these techniques. Go ahead, and check it out yourself. These comments reach a few thousand enthusiasts. If this is your first time here, welcome aboard.
Today, I present you with a quick chart of the Dubai Stock Index. I am giving you a clue. Because the 2 impulse waves are normal, the fifth wave could potentially become an extended wave. However, you should also relate the current impulse wave to the measure of the prior impulse wave to see if you can find some relationships. Go ahead, and test yourself.
Best of luck.
A reader has posted a comment that he ran into trouble with the rule that the 3rd wave cannot be the shortest. (I bought your book and reached the “Rules of the game” Tried to implement it on the DFM Index Chart Starting from the March 2011 bottom i started marking.
I marked end of wave 5 at the end of April 2011 end, but when i tried to apply the rule “Wave 3 can never be the shortest impulse wave” it didn’t work (March 15 to March end). Please advise what i need to do next or you could you mark the DFM index chart)
So today’s post is just an example. (Unfortunately I won’t be able to do this every time a reader has difficulty in counting the waves of a stock that he is interested in!! But my suggestion is to follow the rules as explained, and change your count where necessary)
The most important point is this: don’t worry about having to change your count later on. So long as you are foillowing the rules and guidelines you should be able to take low-risk positions. If you want to tweak the count to suit your personal views, then you are taking the wrong path.