Reliance Symmetrical triangle breakdown @ 784

Reliance Symmetrical triangle breakdown @ 784 Height of the triangle os 104 poionts and sustain trading below 784 will bring to 680 target in near to medium term.

resistance is seen @ 810 CMP is 792

Fitch says China credit bubble unprecedented in modern world history

China's shadow banking system is out of control and under mounting stress as borrowers struggle to roll over short-term debts, Fitch Ratings has warned.

The agency said the scale of credit was so extreme that the country would find it very hard to grow its way out of the excesses as in past episodes, implying tougher times ahead.

"The credit-driven growth model is clearly falling apart. This could feed into a massive over-capacity problem, and potentially into a Japanese-style deflation," said Charlene Chu, the agency's senior director in Beijing.

"There is no transparency in the shadow banking system, and systemic risk is rising. We have no idea who the borrowers are, who the lenders are, and what the quality of assets is, and this undermines signalling," she told The Daily Telegraph.

While the non-performing loan rate of the banks may look benign at just 1pc, this has become irrelevant as trusts, wealth-management funds, offshore vehicles and other forms of irregular lending make up over half of all new credit. "It means nothing if you can off-load any bad asset you want. A lot of the banking exposure to property is not booked as property," she said.

Concerns are rising after a string of upsets in Quingdao, Ordos, Jilin and elsewhere, in so-called trust products, a $1.4 trillion (£0.9 trillion) segment of the shadow banking system.

GBPUSD One pager report (Bear Flag Pattern Formation)

Bear Flag is a sharp, strong volume decline, several days of sideways to higher price action on much weaker volume followed by a second, sharp decline to new lows on strong volume. 
The technical target for a bear flag pattern is derived by subtracting the height of the flag pole from the eventual breakout level at point (e). 
Even though flags and pennants are common formations, identification guidelines should not be taken lightly. It is important that flags and pennants are preceded by a sharp advance or decline. Without a sharp move, the reliability of the formation becomes questionable and trading could carry added risk. Look for volume confirmation on the initial move, consolidation and resumption to augment the robustness of pattern identification.

Bearish flags are comprised of higher tops and higher bottoms. "Bear" flags also have a tendency to slope against the trend. Their trendlines run parallel as well.

• Sharp Move: To be considered a continuation pattern, there should be evidence of a prior trend. Flags and pennants require evidence of a sharp advance or decline on heavy volume. These moves usually occur on heavy volume and can contain gaps. This move usually represents the first leg of a significant advance or decline and the flag/pennant is merely a pause.
• Flagpole: The flagpole is the distance from the first resistance or support break to the high or low of the flag/pennant. The sharp advance (or decline) that forms the flagpole should break a trend line or resistance/support level. A line extending up from this break to the high of the flag/pennant forms the flagpole.
• Flag: A flag is a small rectangle pattern that slopes against the previous trend. If the previous move was up, then the flag would slope down. If the move was down, then the flag would slope up. Because flags are usually too short in duration to actually have reaction highs and lows, the price action just needs to be contained within two parallel trend lines.
• Break: For a bullish flag or pennant, a break above resistance signals that the previous advance has resumed. For a bearish flag or pennant, a break below support signals that the previous decline has resumed.

Targets: The length of the flagpole can be applied to the resistance break or support break of the flag/pennant to estimate the advance or decline.

Looking at the chart GBPUSD is trading near the critical resistance at 1.5680 and is expected to give a sharp reversal from current level. If the resistance of 1.5700 is holding and sustain trading is seen below 1.5500 will enter in negative trend where on lower side it will move and test the lower trend line where it can test the level of 1.5050 support level where point E is expected to test and sustain trading below 1.5050 will confirm the down side breakdown of the Bear Flag Pattern. Height of the Pole is 1420 Pips (1.6250 – 1.4830). Immediately it is expected to test support at 1.5050 and Bear flag pattern breakdown is expected at same level. Sustain trading below 1.5050 will bring lower level target of 1.3600[(1.6250-1.4830)-1.5050] height of the Pole from the Breakdown point of 1.5050 level.

EURO One Pager Report (Bear Flag Pattern Formation)

Bear Flag is a sharp, strong volume decline, several days of sideways to higher price action on much weaker volume followed by a second, sharp decline to new lows on strong volume. 
The technical target for a bear flag pattern is derived by subtracting the height of the flag pole from the eventual breakout level at point (e). 
Even though flags and pennants are common formations, identification guidelines should not be taken lightly. It is important that flags and pennants are preceded by a sharp advance or decline. Without a sharp move, the reliability of the formation becomes questionable and trading could carry added risk. Look for volume confirmation on the initial move, consolidation and resumption to augment the robustness of pattern identification.

Bearish flags are comprised of higher tops and higher bottoms. "Bear" flags also have a tendency to slope against the trend. Their trendlines run parallel as well.

• Sharp Move: To be considered a continuation pattern, there should be evidence of a prior trend. Flags and pennants require evidence of a sharp advance or decline on heavy volume. These moves usually occur on heavy volume and can contain gaps. This move usually represents the first leg of a significant advance or decline and the flag/pennant is merely a pause.
• Flagpole: The flagpole is the distance from the first resistance or support break to the high or low of the flag/pennant. The sharp advance (or decline) that forms the flagpole should break a trend line or resistance/support level. A line extending up from this break to the high of the flag/pennant forms the flagpole.
• Flag: A flag is a small rectangle pattern that slopes against the previous trend. If the previous move was up, then the flag would slope down. If the move was down, then the flag would slope up. Because flags are usually too short in duration to actually have reaction highs and lows, the price action just needs to be contained within two parallel trend lines.
• Break: For a bullish flag or pennant, a break above resistance signals that the previous advance has resumed. For a bearish flag or pennant, a break below support signals that the previous decline has resumed.

Targets: The length of the flagpole can be applied to the resistance break or support break of the flag/pennant to estimate the advance or decline.

Looking at the chart EURUSD is trading near the critical resistance at 1.3300 and is expected to give a sharp reversal from current level. If the resistance of 1.3300 is holding and sustain trading is seen below 1.3200 will enter in negative trend where on lower side it will move and test the lower trend line where it can test the level of 1.2850 support level where point E is expected to test and sustain trading below 1.2850 will confirm the down side breakdown of the Bear Flag Pattern. Height of the Pole is 960 Pips (1.3710 – 1.2750). Immediately it is expected to test support at 1.2850 and Bear flag pattern breakdown is expected at same level. Sustain trading below 1.2850 will bring lower level target of 1.1890[(1.3710-1.2750)-1.2850] height of the Pole from the Breakdown point of 1.2850 level.

Golden Wave - One Pager Positional Report

Gold Cup & Handel Formation from 1996 – 2006 – 10Years Move.

Cup with Handle (Continuation)

The Cup with Handle is a bullish continuation pattern that marks a consolidation period followed by a breakout. As its name implies, there are two parts to the pattern: the cup and the handle. The cup forms after an advance and looks like a bowl or rounding bottom. As the cup is completed, a trading range develops on the right hand side and the handle is formed. A subsequent breakout from the handle's trading range signals a continuation of the prior advance.

1.       Trend: To qualify as a continuation pattern, a prior trend should exist. Ideally, the trend should be a few months old and not too mature. The more mature the trend, the less chance that the pattern marks a continuation or the less upside potential.

2.       Cup: The cup should be "U" shaped and resemble a bowl or rounding bottom. A "V" shaped bottom would be considered too sharp of a reversal to qualify. The softer "U" shape ensures that the cup is a consolidation pattern with valid support at the bottom of the "U". The perfect pattern would have equal highs on both sides of the cup, but this is not always the case.

3.       Cup Depth: Ideally, the depth of the cup should retrace 1/3 or less of the previous advance. However, with volatile markets and over-reactions, the retracement could range from 1/3 to 1/2. In extreme situations, the maximum retracement could be 2/3, which conforms with Dow Theory.

4.       Handle: After the high forms on the right side of the cup, there is a pullback that forms the handle. Sometimes this handle resembles a flag or pennant that slopes downward, other times it is just a short pullback. The handle represents the final consolidation/pullback before the big breakout and can retrace up to 1/3 of the cup's advance, but usually not more. The smaller the retracement, the more bullish the formation and significant the breakout. Sometimes it is prudent to wait for a break above the resistance line established by the highs of the cup.

5.       Duration: The cup can extend from 1 to 6 months, sometimes longer on weekly charts. The handle can be from 1 week to many weeks and ideally completes within 1-4 weeks.

6.       Volume: There should be a substantial increase in volume on the breakout above the handle's resistance.

7.       Target: The projected advance after breakout can be estimated by measuring the distance from the right peak of the cup to the bottom of the cup.

In 1996 GOLD has tested higher level of 418$ which was all time high at that level and then slowly it went in to side way to down side move testing the level of 250$ in 1999 and 2001 year. There after slight upside move was seen gradually where the top resistance was tested at 430$ where the CUP formation is seen and there after Handel formation was seen where breakout was at 420$ level. Height of the CUP is 180 points and after the breakout point gold gave sharp rise after slight consolidation where it tested the level of 730$ mark. This rise was 161.8% rise from the breakout point of 420$ where the target of 711$ was tested. [(180*161.8% = 291 points) – (Breakout @ 420$ + 291 Points = 711$)]

Elliott Wave Theory was developed by R.N. Elliott and popularized by Robert Prechter. This theory asserts that crowd behavior ebbs and flows in clear trends. Based on this ebb and flow, Elliott identified a certain structure to price movements in the financial markets. The article serves as a basic introduction to Elliott Wave Theory. A basic 5-wave impulse sequence and 3-wave corrective sequence are explained. While Elliott Wave Theory gets much more complicated than this 5-3 combination, this article will only focus on the very basics.

There are two types of waves: impulse and corrective. Impulse waves move in the direction of the larger degree wave. When the larger degree wave is up, advancing waves are impulsive and declining waves are corrective. When the larger degree wave is down, impulse waves are down and corrective waves are up. Impulse waves, also called motive waves, move with the bigger trend or larger degree wave. Corrective waves move against the larger degree wave.

From the above chart Gold has started its upside rally from the level of 410$ and tested the level of 1032$ which was the starting of the Wave Theory and it was the I Wave. There after minor correction was seen from 1032$ to 682$ in the form of wave II  which was just near to 50% retracement of wave I, there after it enter in wave III. Looking at the wave III it tested the higher level of 1920$ and it has retraced by 200% of wave I from the bottom of wave II, and exactly tested the higher level of 1920$ and started its correction in the form of wave IV. Currently it is in the continuation of the wave IV where it is forming a-b-c pattern, wave b has corrected by 61.8% of wave a and is trading below 100% expansion of a-b from c indicating 161.8% expansion of 1168$ is expected to test on lower side. Wave IV if we calculate on retracement level is expected to retrace by 61.8% of wave III which also brings to 1150$ in same line of a-b-c pattern. It is clear that the wave IV is expected to test level anywhere between 1162$ to 1150 where 1150$ is the 61.8% retracement of wave IV from 682$ to 1920$. From the lower range of 1162$ to 1150$ reversal in prices are expected and entering in the V impulsive wave on higher side Gold can move and test the level above 3034$ which is 300% retracement of wave I from bottom of wave IV. Concluding to the above theory any dip near the range of 1162$ to 1150$ will be the positional entry level for the target of 3000$ and above in near to medium term.

Three Guidelines

There are numerous guidelines, but this article will focus on three key guidelines. In contrast to rules, guidelines should hold true most of the time, not necessarily all of the time

Guideline 1: When Wave 3 is the longest impulse wave, Wave 5 will approximately equal Wave 1.

Guideline 2: The forms for Wave 2 and Wave 4 will alternate. If Wave 2 is a sharp correction, Wave 4 will be a flat correction. If Wave 2 is flat, Wave 4 will be sharp.

Guideline 3: After a 5-wave impulse advance, corrections (abc) usually end in the area of prior Wave 4 low.

Wave Count flow chart

Year	Start	Finish	Difference	% retrace
May 2005	410	1032	622	100 Base
March 2008	1032	682	350	56%
October 2010	682	1920	1238	200%
September 2011	1920	1168	752	161% expansion a-b-c
September 2011	1920	1150	770	121% retracement
Expected 2013 end	1150	3034	1866	300% retracement of wave I from wave IV

Reliance Positional Head & Shoulder Pattern CMP is 787

Reliance is expected to take initial support @ 784 and further trading below Neckline support is seen @ 764 on closing basis. If this support is further broken then Head & Shoulder Pattern breakdown is confirm which will bring it to first target of 670 and then after short consolidation will bring it further down to test 588 which is the height of the head as the actual target after the break down.