Elliott Wave Case Study: India’s SENSEX

By Elliott Wave International

One strength of Elliott wave analysis is its ability to reveal key turning points — before the crowd catches on.

India’s Sensex in 2008 is a textbook case.

During the Great Financial Crisis, Elliott Wave International's Senior Analyst, Mark Galasiewski, identified a wave pattern that pointed to a major rally ahead — even as sentiment was deeply bearish.

Check out this excerpt from the November 2008 issue of EWI's Global Market Perspective:

“Notice how the up-down sequence labeled Intermediate waves (1) and (2) (in the small red box) is a microcosm of the larger up-down sequence from the 2003 low to the present (i.e., waves 1 and 2, in the large black box). In both cases, the wave-two correction retraced approximately 50% of the wave-one advance.

If we have identified this ‘nested fractal’ relationship correctly, it means that Indian stocks are about to begin Primary wave 3 of the bull market that began in 2003.”

What Happened Next: The Sensex rallied almost nine-fold to its 2025 high.

Learn how to identify Elliott wave patterns and anticipate reversals in your charts. This handy FREE resource teaches you the Elliott Wave basics in 30 minutes >>

This article was syndicated by Elliott Wave International and was originally published under the headline Elliott Wave Case Study: India’s SENSEX. EWI is the world's largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.

This chart tops the dot-com peak (and it’s about your money)

By Elliott Wave International

Here’s a chart worth a minute of your time, especially if you have money in the stock market.

It comes from Elliott Wave International’s newly updated free report, The Most Dangerous Market in History? 18 Flashing Red Signals You Shouldn’t Ignore. Here’s what EWI’s analysts say about it:

“Investors are committing an extraordinary amount of their wealth to the market. The chart below shows that at the end of the first quarter of this year, households had 46% of their total financial assets in the stock market. The current extreme is 19% higher than it was at the top of the dot-com mania in 2000. Household wealth today is completely tied to whether the stock market rises or falls. At the Cycle wave IV low in 1974, households had 11.4% of their financial assets in stocks. At the end of Cycle wave IV in inflation-adjusted terms in 1982, the percentage committed to stocks was just 9.5%.”

Look at where the chart’s high and low points sit. Stock ownership was low near major market bottoms and high near major tops. Today’s reading is above them all.

This chart is one of 18 in the report. The others cover record valuations, margin debt, professional and advisor sentiment, market concentration, and even housing. Together they show how far optimism has stretched, and why EWI believes that matters right now.

Read the Full Report Free: See All 18 Flashing Red Signals