Market Mayhem - The Big spike

Last time I wrote that prices are signalling an end to the bear market. I was rather interested in finding out whether the previous bear markets ended in the same manner that we witnssed this time. WIthout much delay, take a look at the following graph. It is very similar to the graph made by dshort.com. Actually I was interested in making one for the sensex.

Sensex - The Four Bear Markets

There is a compelling evidence that the last bear market of 2000 is similar to the current move. The bottoming out process is quite similar and the subsequent rally is also significant.

Coming to the Elliott wave analysis, we are forming the wave '1' of a larger degree impulsive wave to the upside. The current move suggest that the wave '1' is in the final stages of formation and may end near the levels of 3500 - 3600. The subsequent wave '2' would be a zig-zag and would be deep.