IMOEX Marco technical - One more massive correction or...?

5 paź 2023

My macro work on Russian MOEX Index illustrates how ElliotWave in conjunction with major fibonacci retracements can be useful in providing the context or the operational frame work for every investor and trader to operate and execute one's strategy.

Starting from the market Oct'98, we may observe how the price structure has accurately finished its cyclical five wave move lasting almost exactly 23 years to Nov'21 finishing its run just 2.5% bellow an proper (though extended) target for the cyclical wave "V".



The EW theory, first elaborated by Ralph Nelson Elliott in 1930s, and later perfected to the most practical investing/trading principals by Avi Gilburt from elliottwavetrader.net, states that most of corrective structures develop in three waves: A-B-C.

After finishing what I consider to be first cyclical macro five wave advance in Nov21, the price moved into deep and abrupt correction, straight to the ideal golden ratio
(0.618) support zone where it is most typical for any correction (macro and micro) to establish a bottom. That was not particular to average character of the three wave corrective structures (being so abrupt), but the support parameters were met.

Never the less in my global technical thesis, I still lean towards the macro correction from the Nov'21 highs NOT being complete and the price is yet to start its third wave decline to 1650 (double bottom) or even 930 zone. I am 55/45 on that regard.



That being sad, I cannot completely rule out the possibility of price to have established long-term macro bottom on Feb22 and that we may be already in the very early process of the new (generational?) bull-cycle. As strange as it may sound in today's global political landscape, new macro generational potential for IMOEX, could be very much considered in the realms of several important circumstances happing in Russia:

1. 1. Currency devaluation (bullish for equities);
   
2. 2. Inflation (typically bullish for equities);
   
3. 3. Internal barriers to withdraw capital (indirectly bullish);
   
4. 4. Redomiciliation of large corporations and their capital;
   
5. 5. Record interest of citizen to local stock market, resulting in record breaking numbers of new accounts opening on Moscow Stock Exchange.
   
6. 6. Perspective budget deficit that will result in point #1 (bullish for stock)
   

Macro parameter to differentaite between Macro-Bearish and Macro-Bullish scenarios is simple: until price is bellow 3700 area, macro-bearish case cannot be rule-out.



The Mid/Short-Term Analysis



Until price decisively breaks 2800, I cannot consider the mid-term bullish advance in either cycle wave "B" (macro bearish case), or wave (3) (in generational-bullish case) toped and expect at least one more wave up to 3370-3650 area in Q4 or Q1'24.

It is yet early to consider that price has finished its Sep's correction at 3000 area and until price is bellow 3220 resistance zone, I expect one more decline to 2800. If price moves above 3200, than I will shift to yellow/green alt. scenario that wave 4 correction has finished and the price is on its wave to new 2023 highs.