Every now and then I get a request to do Elliott Wave Analysis of a new instrument, and this time it is the turn of the IMKB-100, or the benchmark equity index of the Istanbul stock exchange in Turkey.
As regular readers of this blog know, I beleive that you could apply Elliott Waves to any well traded instrument and frequently the result is an eye-opener. I am sure there are thousands of traders in Turkey who are unaware of how they could benefit if they applied even some basic concepts that is explained in WaveTimes. So this post is dedicated to them. Please share.
There are two charts that are presented here. The first one is a long-term week chart. You can see how we got a nice five wave rally from the mid 1990s. The third wave was 200% of the first wave. Then we got a 38.2% correction as wave 4, followed by a fifth wave that was itself capable of being broken down into 5 minor waves. The ending point of the fifth wave was predictable using the method I explained in the book ‘Five Waves to Financial Freedom’. If one had gotten out near there, he/she could have escaped a loss of 61.8% in the value of the broad market!
The next chart gives you the details of the new up move that began after the major correction. This is a daily chart, and once again you can see how one could have used Elliott Wave Analysis to benefit.
I have also drawn a tentative path the five waves of the current C wave should travel. Once that move is over, expect a relatively large downmove again to complete a correction of the huge rally we saw from near 20,000 to above 70,000.
Things get more complicated in the recent chart.
[I read the book]
I still don’t quite get a couple of things from the second chart:
1- on the first leg up to 5, why we turn into a-b-c-d-e to count wave 5 and what it means.
2- why we call this last leg up an “X”, and not a new rally of 5 waves, and since we had the bottom in 2009 and we already had 1 wave up followed by a correction, wave 2, this last leg should be wave 3 of 5.
This “X” thing is not that clear in the book. Could be myself though..
thanx a lot Ramki 🙂
Hi Luca, When a fifth wave becomes a diagonal triangle, it can have overlaps of wave1 by wave 4. We also usually label the five internal waves as a,b,c,d,e. About the X wave, it is just a wave that separates two sets of abc, or two zig zags for example. A complex correction is a combination of different corrective formations eg flats, zig zags, triangles etc. The waves that separate two such formation is a zig zag. WHy is the current rally an X wave and not an impulse? It is a judgement call. PLease read my reply to another readers question here.
thanx very much! 🙂
Hello Ramki, do you see any possibility for you to update the natural gas analysis?
Thank you in advance,
Lumir, I plan to look at that soon. But please post the questions under the right topic!
Really nice and helpful post, thanks alot for sharing your thoughts with us.
Zizo, its my pleasure. Just share with all your friends, because it is all here for free!
very good to see Turkey chart analysed by you. Thanks a lot.
I have two questions ;
1- why do you think current move up is a corrective zigzag , why not an impulse wave up from the bottom ,
2- on your long term chart, you noted that wave 5 ends at %123.6 of Wave C from wave 4.. I never heard this before.. Pls note I have purchased and read your book but this type of wave 5 not mentioned. pls correct me if I am wrong
Thanks again and Best Regards
Hello Mehmet, The first chart is the long term chart, the second is the more recent upmove. (1) I am labelling the current upmove as part of a complex correction for just the same reasons why I think the S&P500 is also due to come down. It is a judgement call at the end of the day. When you see a 5 wave move finish around the levels I have marked as ‘X’ you should anyway get ready for a correction. Whether it becomes a correction of the first leg of a new bull market, or it becomes a rout (taking it straight down to the buy zone) is something we will deal with later. For now you have a road map. We will take it one step at a time. Remember we always have the right to change our minds because it is OUR money. We don’t care for being accused by others of calling it wrong, do we? We are more concerend with navigating the market with an edge that ELliott Wave analysis will give if you follow my techniques. (2) It is 123.6% of the distance from 0 to iii, only I forgot to put the small ‘0’ next to the number 4. This is covered in the book, in the section dealing with how to measure the end of the 5th wave target. It is basically 61.8% upwards, and if the distace goes more than 61.8%, it is an extending fifth wave. Note that we got a fairly quick downmove after the extended fifth was completed, down to near wave ii of the fifth (indicated as ‘b’, another concept I have covered in the book.
Thank you very much ..Best Regards from Istanbul. Mehmet
could you offer your insights on the canadian tsx
any way of getting your book in book form—not kindle
Hi Ron, will take a look at you index too 🙂
Re the book, afraid not just now.besides there are numerous links in the book which make it more interesting to the reader, which will be lost in print format
I just came across this page and started learning about the wave analysis. I’ll keep reading and I’m sure I’ll benefit a lot from it. For the moment, I have a quick question about IMKB. For the tentative path of the current C wave you drew on the second chart, the subwave iii has been up to 63,ooo maximum -yet-, and went down to 61,400, crossing down the dotted line you drew (where you wrote “when this overlap occurs…”). Does this mean that we can expect a correction starting soon (in stead of starting later at abouve 70,000) or that such minor moves are negligible and we’ll eventually see subwaves iv and v?
Thank you so much in advance.
Hi Simon, Thanks for the comment. The key words are written just on top of the anticipated progression of waves “When this overlap happens AFTER we finish the five waves up….etc” So we need to see a 5 wave movement that makes up the C wave. Any overlap AFTER the completion of C wave is a bearish signal.
Im very happy to see u r analys imkb 100 turkey.If it possible can u share us with the last situation.Have a nice day thank you .
Hello Sky, Welcome to the club! Support around 58170 levels should hold first attempt
We are in 58092 now and next support will be around 57500 ?
Thank you so much.
Hello Sky, The signs are not good. It looks like the X wave could well have finished already. You should not make the classic mistake of looking for supports to buy when the more desirable trade will be to pick low risk levels to sell. Initial resistance lies at 59150, 59400. Think there is a reasonable chance to see 57050 or 56800.
Hello again Mr.Ramki
A lot of people waiting your last comment for IMKB-100. Can you share with us in your free time thank you so much.