# Elliott Wave and the XAO



## OzWaveGuy (4 May 2009)

I thought I'd create a specific thread for discussion of EW and the XAO....


Since the 21st Nov 08, each of the larger legs on the XAO has been moving in 3 wave patterns - corrective waves. The most recent leg up (wave C), shows a triangle (wave 'b' circle) for the intervening correction found in 3 waves moves. This triangle implies the trend is about to change so watch for 5 waves up (or an ending diagonal) to complete shortly .

The larger pattern unfolding since the 21st Nov is starting to resemble an Expanding Triangle - found in wave 4 positions. To be valid, the XAO must deliver wave D and E, again as 3 wave moves.

A second consideration is that we are seeing the final push up of a double zig-zag correction (not labeled). The completion would see the downtrend resume, although this is also the same for the expanding triangle scenario for wave D. Either way a new low is expected.


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## tech/a (4 May 2009)

Like it.
Ive had a look at a few counts and this looks the most probable.
I agree there is a final wave 5 in the mix.
This for me is best seen in the weekly count.
Click to expand.


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## Boggo (4 May 2009)

OzWaveGuy said:


> The larger pattern unfolding since the 21st Nov is starting to resemble an Expanding Triangle - found in wave 4 positions. To be valid, the XAO must deliver wave D and E, again as 3 wave moves.




Interesting...
How do these points fit with Aget MOB on the daily tech/a ?

(click to expand)


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## tech/a (4 May 2009)

Boggo.
Pretty similar (ignore the count I dont agree with it as the impulse waves Arent there!).

Think in the next day or so we will see the last gasp!

Click to expand.


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## Boggo (4 May 2009)

Ta tech/a

I am seeing probably more than usual potential end of wave sells and less buys appearing in Elliott Wave and ABC etc scans.
It wouldn't take much to topple the current run up, however, if it powers through this "Decision Point" (a level where the market will make a decision whether to reverse or not) then 4400 perhaps ??.


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## tech/a (5 May 2009)

Well this is interesting.
Click to expand


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## Chris45 (5 May 2009)

60 days up from the SPI Total bottom on Mar-6. Very interesting indeed!


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## nunthewiser (5 May 2009)

nice to have you back ozwave


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## OzWaveGuy (6 May 2009)

nunthewiser said:


> nice to have you back ozwave




Thx, took a few hols.


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## OzWaveGuy (6 May 2009)

Under the Expanding Triangle scenario, Wave 'C' appears to be close to completion where one last leg up should push to a new short term high. 
There is solid resistance at 3950, where this final leg up will be exactly 61.8% of the 'a' circle leg.

The second chart shows how an expanding triangle may play out. The final wave 5 down will most likely fail (in large corrective scenarios like this one), before correcting upwards (for some time).


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## Sean K (11 May 2009)

EW'ers still running with a W4?

Have you all been short and/or staying out of stocks and indicies as you've been waiting for the W5 down? 

If so, missed a few points by the look.

If you're right, nice work, going to be an awesome oportunity once that final leg down comes to fruition. I haven't been fully invested expecting one more leg/capitulation, as painful to watch as that has been. Missed some amazing opportunities. But caught a couple too.

When is this W4 invalidated, and we actually saw a W5 bottom, if that is possible?


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## OzWaveGuy (11 May 2009)

*XAO - Expanding Triangle for Wave (4)*

The Wave 'C' up leg in the Expanding Triangle Scenario for the XAO could well be complete (or very near completion with an additional sub-divison that takes the XAO above 3950). 

The 3950 target was almost reached today and is a site of solid resistance and does provide a suitable area for a turn down into the wave 'D' leg of the Expanding Triangle. 

Timewise there is relationships between the two upward sub-divisons of wave 'C'. The  'a' circle leg and the 'c' circle leg (not labelled) - the 'c' leg is 63% of 'a' - a very close 61.8% fibonacci relationship of time

I've also include the MACD signal line, a short term high representing the end of wave 'iii' shown with the dashed line, and the subsequent divergence of the MACD as price hits a new short term high (representing wave 'v').

*XAO Next Steps*
Prices need to turn down from here (or perhaps after one more small push upwards) for the Expanding Triangle to continue to be a top contender. Five small waves down and a break of the short term trendline will be an indicator that suggests a turn has started.


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## nunthewiser (11 May 2009)

FINALLY!

im in total agreement with your latest chart and perceived direction posted

have a great evening


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## tech/a (11 May 2009)

nunthewiser said:


> FINALLY!
> 
> im in total agreement with your latest chart and perceived direction posted
> 
> have a great evening




Definate sign for long positions tommorow.

Thanks NUN


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## nunthewiser (11 May 2009)

tech/a said:


> Definate sign for long positions tommorow.
> 
> Thanks NUN





happy to help ........ go for it


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## clayton4115 (12 May 2009)

you went long and the market drops 2%?


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## nunthewiser (12 May 2009)

clayton4115 said:


> you went long and the market drops 2%?




not me bud , im in total agreement with ozwaves view here ......... my entrys are bandied around the threads


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## clayton4115 (12 May 2009)

yeah i was talking to tech/a

where does it look long from those charts?


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## Sean K (12 May 2009)

clayton4115 said:


> yeah i was talking to tech/a



I think tech was taking the p!ss. LOL


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## Chris45 (12 May 2009)

So who is the best contrarian indicator around here?


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## Boggo (13 May 2009)

One way of having a go at it, blue or red bars in a decision area are usually a heads up.
Seems a big ask though doesn't it ?

Just my 

(click to enlarge)


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## kotim (13 May 2009)

If we take out that recent top instead then the bear market is over, have a look at 02/03 bottom and the same sort of pattern action occured, not exactly the same but very similar. 

anyway time will tell


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## Chris45 (14 May 2009)

I've listed some reasons to support the possibility of 11-May being wave 4 of 5.

1. Socialist politicians optimistically forecasting an early end to the recession - "green shoots" etc.
2. Krudd & Co's "Robin Hood" budget just released yeilding massive deficit.
3. Old adage: "Sell in May and go away".
4. Weekly stochastic in sell territory above 75 (previous occasion was May-08).
5. Daily stochastic also in sell territory above 75.
6. 11-May approx 38% retracement of wave 3 of 5.
7. Perfect hit on AGET's MOB (time and price).
8. 11-May is 62 days from 10-March Low (Mar08 Low to May08 High = 63 days).
9. 124 days T-T ~= 127 days previous T-T (see Sails' thread).
10. SPI has now made a significant penetration of the uptrend line from 10 March.

The evidence now seems to be pointing to a wave 5 of 5 decline possibly to at least 2950 in early July. Time will tell of course but what do others think?


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## OzWaveGuy (16 May 2009)

*XAO - Expanding Triangle for Wave (4)*

*Wave ‘D’ down is underway. *

Firstly, there haven’t been many recent expanding triangle scenarios on the XAO, so information of the internal relationships isn’t readily available. Hence, applying the standard triangle guidelines, one can derive some probabilities and targets for the unfolding D wave.


Triangle legs moving in the same direction can roughly have a 61.8% relationship in price. Therefore this would place the ‘D’ wave at around 2860 where there is significant long term support in this area (there is a 65% price relationship between waves A and C, very close to the 61.8% fib ratio)
In the upwards legs (waves A, C), the ‘b’ circle corrections have been quite complex versus the first down leg (wave B). Hence, the expected correction in wave ‘D’ down may be simple as well (eg a flat or zig-zag) and have a fib relationship of time to the ‘b’ circle in wave ‘B’.
Time wise, the Expanding Triangle waves A and C relate by 70%, apply this to wave B and D, Wave D may complete in around 60 days
The first leg of wave ‘D’ – wave ‘a’ circle down will meet reasonable support at 3500. So this would be a probable target for this wave until more sub-divisions unfold on this initial leg down.


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## Sean K (18 May 2009)

I didn't realise there was a W-D as well.



I've got to buy one of these books.

I only just got my head around the wxy....


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## OzWaveGuy (26 May 2009)

*XAO - Expanding Triangle Scenario for Wave (4)*

There is building evidence that the XAO could break down from the current levels by the fact that a series of 2nd waves could be considered complete. So far, the downwards moves have been unfolding in 5 waves - indicating further downside is required.

A break below the end of wave 'i' would suggestive of the next smaller legs down commencing. Alternatively further corrective moves slightly higher could still unfold before the downside resumes.


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## OzWaveGuy (27 May 2009)

*XAO - Expanding Triangle, Wave D*

The update from today's action is fairly straightforward - from a short term standpoint, there is solid probability for further upside tomorrow to complete 5 small waves up - which would complete a Flat correction for wave (ii)


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## OzWaveGuy (1 June 2009)

*XAO - Expanding Triangle Scenario for Wave (4)*

The XAO will need to turn down from the current levels in order to maintain the declining wave D for the Expanding Triangle scenario in wave (4). 

The correction that commenced in mid-May has turned out to be a double flat correction - which could signify the major 'b' wave in this leg down. If so, then the following action downwards may be quite aggressive.


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## Trembling Hand (1 June 2009)

OWG you have been calling for the March lows to be tested since we left them some 800 points and more than 2 months ago.

I guess if nothing else your persistence is entertaining.


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## beamstas (1 June 2009)

Trembling Hand said:


> OWG you have been calling for the March lows to be tested since we left them some 800 points and more than 2 months ago.
> 
> I guess if nothing else your persistence is entertaining.




That is the beauty of EW
Just keep on re'paintin till you are right!


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## nunthewiser (1 June 2009)

Trembling Hand said:


> OWG you have been calling for the March lows to be tested since we left them some 800 points and more than 2 months ago.
> 
> I guess if nothing else your persistence is entertaining.





personally agree on his last couple of charts  .... my top of rally called on day of top of rally in another thread still stands and will have to re-evaluate my strategy if it gets broken .................... in the meantime skim scalp trim snipe dump scoop nab some pizzas and just basically play any miniscule channel and rallys as i see it 

we going to crashnburn and there aint nothing you can do about it 

edit . sorry i worded it wrong ....... my overall meaning is that i think we heading down out of this channel when it decides to break a proper ....... where i say i agree with his charts i kind of mean i agree on percieved directions 

geez now im just rambling 

as you were


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## nunthewiser (1 June 2009)

also i suppose , time tells all 

the market will do whatever the market feels like doing


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## Trembling Hand (1 June 2009)

nunthewiser said:


> geez now im just rambling
> 
> as you were




I'll comment on the main XAO thread because this is after all an EW thread and I don't know my ABCs for DICs.


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## Sean K (5 June 2009)

OzWaveGuy said:


> *XAO - Expanding Triangle Scenario for Wave (4)*
> 
> The XAO will need to turn down from the current levels in order to maintain the declining wave D for the Expanding Triangle scenario in wave (4).
> 
> The correction that commenced in mid-May has turned out to be a double flat correction - which could signify the major 'b' wave in this leg down. If so, then the following action downwards may be quite aggressive.



Since the b in a circle has run up past C, does this invalidate the count, or does it all have to be rejigged?

ie, can you rename this next peak as a b and a C and it's all cool?


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## Porper (5 June 2009)

kennas said:


> Since the b in a circle has run up past C, does this invalidate the count, or does it all have to be rejigged?
> 
> ie, can you rename this next peak as a b and a C and it's all cool?





Kennas, I answered this yesterday in the XAO thread. The a.b.c count is still on the cards as either a running flat pattern or an expanded flat,but not the alternate wave-i, and ii. Wave ii cannot retrace above the wave i which it has.

One more good push up and it will be put to bed in my view.

More important are the US markets and they have further room to rise while keeping the bearish count in place.Irrespective of what Aus does, if the US head lower, so will we.


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## Sean K (6 June 2009)

Porper said:


> Kennas, I answered this yesterday in the XAO thread. .



Another question. If this running flat is invalidated, and we did in fact see the bottom at 3050 ish in March, is it going to be possible to turn all the numbers around prior to that to make that a 5, and we are now in a new impulse going overall higher? Or do we simply *have* to make another low?


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## >Apocalypto< (6 June 2009)

cant u all just let these guys have a thread with out crap posted at them for any analysis they put up???

I have never seen Oz wave or Porper come in and attack scalping the spi.....

come on guys let them enjoy the type of trading they find best suited to themselves...

I am not into EW at all but I can appreciate it. 

No offense but a select few of you are destroying the diversity of ASF in my opinion.


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## Sean K (6 June 2009)

>Apocalypto< said:


> cant u all just let these guys have a thread with out crap posted at them for any analysis they put up???
> 
> I have never seen Oz wave or Porper come in and attack scalping the spi.....
> 
> ...



Huh? This is obviously a comment regarding my question about the EW analysis of the XAO being presented. You seriously saying I can't ask a question about the analysis? How is that destroying the thread? Double geesh!!


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## >Apocalypto< (6 June 2009)

kennas said:


> Huh? This is obviously a comment regarding my question about the EW analysis of the XAO being presented. You seriously saying I can't ask a question about the analysis? How is that destroying the thread? Double geesh!!




why does every thing have to be about u Kennas??? 

I said a few people if I thought it was you kennas I would have said, kennas you're ruining this thread.

tripple geesh


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## Sean K (6 June 2009)

>Apocalypto< said:


> why does every thing have to be about u Kennas???



No one else has posted in this thread for a week, yet my post draws you out of the closet.

I'd like to discuss EW rationally, but as I said in the XAO thread, asking questions about the analysis is like lighting a stick of dynamite. 

The question is, 'is there an alternate count to the March lows being a W3. Or could it be an absolute low 5?'

Do you have anything to add on the analysis?


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## >Apocalypto< (6 June 2009)

kennas said:


> No one else has posted in this thread for a week, yet my post draws you out of the closet.
> 
> I'd like to discuss EW rationally, but as I said in the XAO thread, asking questions about the analysis is like lighting a stick of dynamite.
> 
> ...




read the entire page Kennas then ask yourself I made that post at u!!!!!

I like to read the analysis without all the doubters coming in with cheap shots.. that's what a forum is about learning... if I was new to EW and I read some of the comments I would not feel comfortable posting. Is that how you want new members to possibly feel?

ok exchange over u think about it....


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## tech/a (6 June 2009)

I can see where Kenna's is coming from.

I also understand Oz Wave and Porper.

Most are aware that I love simplicity even when complexity seems the best solution.
Elliott particularly in corrective moves can appear very complex.
The goal posts are seemingly constantly moving.
Counts changing weekly if not daily.

Its no different to any other analysis.
If any other analysis indicates something is likely to happen and it fails to materialise then pretty soon something else will appear technically in the same chart to suggest another likely out come.

So whats Elliott telling us now.
This move is topping out. 
This like all analysis is open to Interpretation/Confirmation and or Change.

So I'm looking very cautiously at any long trades and seriously at short trade setups.
NWS was pointed out to me by one poster here as a short prospect and I like it!
*
click to expand XAO*


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## Chris45 (6 June 2009)

Glad to see you posting again tech/a. I, for one, value your input.


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## seasprite (7 June 2009)

tech/a said:


> So I'm looking very cautiously at any long trades and seriously at short trade setups.




yes,yes, yes totally agree.



tech/a said:


> So whats Elliott telling us now.
> This move is topping out.
> This like all analysis is open to Interpretation/Confirmation and or Change.




This whole rally is fundamentally based on absolute rubbish , which suits me just fine. How my prediction fits into EW is anyones guess . XAO up to 4150 then pullback starting around Thursday or Friday with US Bonds as the negative catalyst.


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## OzWaveGuy (10 June 2009)

*XAO - Expanding Triangle for Wave (4)*

Under the Expanded Triangle scenario, Wave C has continued to new short term highs but has provided more clues to it’s structure – namely 4 small waves up ‘i-iv’ have completed (wave iv may still have one more leg to complete). The wave ‘b’ circle has unfolded as a triangle, but an additional triangle unfolded within this correction to add complexity in calculating it's ending point.

Five waves up on the last leg of wave C should complete very shortly and provide a turning point just above the 4000 mark (to around 4070). Wave ‘iv’ may not yet be complete, therefore some minor downside could unfold before heading higher to complete 5 waves up.

It should be noted that wave 4’s tend to retrace 38.2% of wave 3’s – this would put a completed wave 4 retracement at around the 4300 mark on the XAO. Therefore a drop into wave D down (to a new low) and then back up into wave E at around 4300 would be a reasonable estimation for a completed expanded triangle scenario. Wave (5) down would then commence.


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## Joules MM1 (10 June 2009)

OzWaveGuy said:


> *XAO - Expanding Triangle for Wave (4)*
> 
> Under the Expanded Triangle scenario, Wave C has continued to new short term highs but has provided more clues to it’s structure – namely 4 small waves up ‘i-iv’ have completed (wave iv may still have one more leg to complete). The wave ‘b’ circle has unfolded as a triangle, but an additional triangle unfolded within this correction to add complexity in calculating it's ending point.
> 
> ...




i do miss the occassional biffo about ralph nelsons fine work......to wit;

expanded wedges do not start at the beginning of wave a, they start at the *end* of wave a.... also you should look for a squaring reversal where the inverse measure of wave c is likely 1.618 or 2.618 of wave a and in which case, experience has shown me, that this is unlikely to unfold as an expanded fourth wave which still requires waves d and e to qualify a true expansion.....at the moment you are seeing a simple variation of a flat zigzag

also, expanded triangles form in series of threes including wave c but and where wave e is (commonly) a fib measure of wave c...... wave a volume is commonly heavier than wave c and wave b is commonly lighter than either......
wave a and b are in threes and wave c should look the same to qualify as part of an expanded fourth (fairly mute debate without waves d and e)
stuff to mull over.....otherwise your chart looks good .....commend you await wait wave d to terminate, if that is what we are, indeed, seeing..


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## Porper (11 June 2009)

Joules MM1 said:


> experience has shown me, that this is unlikely to unfold as an expanded fourth wave which still requires waves d and e to qualify a true expansion.....at the moment you are seeing a simple variation of a flat zigzag




I agree you can't have a three wave a.b.c move terminating at the larger degree wave-C. To be valid waves d & e need to complete which would take price much higher.


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## Joules MM1 (11 June 2009)

Porper said:


> I agree you can't have a three wave a.b.c move terminating at the larger degree wave-C. To be valid waves d & e need to complete which would take price much higher.




under the auspice of absolute measure wave e does not always travel to a higher price or always move above wave d .....and the underlying pressure (in this case, overwhelming sellers) may shorten the 'normal' length of  the e wave...often, wave e is a hook and does over shoot the height of the expanded wedge, as the technician has drawn, which gives a false impression that the ill-concieved bull move is resumed.....this is commonly referred to as a throw-over....more like a hook

i think this to be important; allow the waves to speak in full language, by that, i mean, allow all the opaerative waves to speak before telling the pattern your own ideas.....all waves are operating at all times and while some may be dominant the key is, as it is in all trading instances, to allow overwhelming evidence to display first and then place the opine lables .....as one of the beauties of elliott is "if this is true" then the probabilities of "this not being true" are given greater credence.....

that is, in my humble opine

(as an aside, this op ed does not refer that the xjo or xao being in a bounce or in a bull phase)


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## Porper (11 June 2009)

Joules MM1 said:


> under the auspice of absolute measure wave e does not always travel to a higher price or always move above wave d .....and the underlying pressure (in this case, overwhelming sellers) may shorten the 'normal' length of  the e wave...often, wave e is a hook and does over shoot the height of the expanded wedge, as the technician has drawn, which gives a false impression that the ill-concieved bull move is resumed.....this is commonly referred to as a throw-over....more like a hook




True, but in my short experience, it is very difficult to predict whether wave e will be a "throw over" or truncated. Other indicators used in conjunction along with volume attributes may help but as I understand it neither possibility has a higher probability of coming to fruition.

Any direction on this aspect of E.Wave is welcomed.


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## OzWaveGuy (16 June 2009)

*'Recession fears cripple stocks'*

That was the headline on CNN Money this morning, I thought we were already in a recession/depression/major correction/or something - when you can't pin the market action on an event - make up a headline, a usual Media tactic.

Another way to interpret the recent down leg is that wave D of an expanding triangle is now underway on the XAO.

The 4070 mark was hit and exceeded last week topping at 4079 or almost spot on 61.8% of the previous 'a' circle leg. The 4079 level should not be broken in the expanding triangle scenario - if it is, then something much more complex is unfolding. The wave structure from the recent top is moving in 5 waves down, so there is supporting evidence that more downside is to follow. This supports the probability that wave 'D' down is underway. 

A rough short term wave structure is provided that suggests a retracement is needed soon before wave (iii) takes hold for more aggressive downside (should this short term wave structure unfold, then technically a head and shoulders pattern would unfold).


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## Sean K (25 June 2009)

OWG, I have asked this question in a couple of places, but I've been deflected because I tend to ask too many questions.

This is your thread. 

Is there an alternate count?'

Could the March low be THE low?

If not, OK.

Just a yes, no, or maybe will do.


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## beamstas (25 June 2009)

Of course it could Kennas.

The market will do what the market will do, not what EW says it will do.


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## Sean K (25 June 2009)

beamstas said:


> Of course it could Kennas.
> 
> The market will do what the market will do, not what EW says it will do.



I thought EW represented the psychology of the market. 12345, ABC, abcxabc, etc, etc, with a abcd and a xyz in there as well...

I remember 'prove - disprove' somewhere too, so does that mean anything is up for grabs?

I thought you believed EW but now the 'market will do what do what the market will do', despite any theory?



I LOVE the idea of some overall controlling trend in market/life dynamics, and I WANT to see it here.


So, in line with the EW presented here over the past few years there are probably some alternate counts.

For discussion, not crucifixion.


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## beamstas (25 June 2009)

I know what you are saying, Kennas.
EW can be proved OR disproved

BUT EW can't stop itself being disproved by not allowing the market to disprove it.

If the market is going to make a new low, then it's going to make one, regardless of any EW count or any other technical analysis.

I'm not saying Eliott Wave isn't useful, it just isn't going to stop the market making a new low regardless of any counts.


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## White_Knight (25 June 2009)

beamstas said:


> I'm not saying Eliott Wave isn't useful,




I am.

And what's this feelgood factor that you cant defame certain "strategies" because you might upset newbies?

It's a hard game, and if you cant handle criticism of the way you call the market, i dont see how you can handle losing money.

Although i guess all this is pretty much irrelevant - whatever the market does it will be explained 5 years down the track as a Wave Formation z5c3a4B with a twist manifesting itself in a "larger pattern".


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## beamstas (25 June 2009)

White_Knight said:


> I am.
> 
> And what's this feelgood factor that you cant defame certain "strategies" because you might upset newbies?
> 
> ...




Do you use technical analysis?


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## White_Knight (25 June 2009)

Yes - and although i am a relative newbie there's a lot to be said for the use of _continuous indicators_, trend analysis etc - you can actually see it working in practice which is more than i can say for EW, which is totally ethereal in nature.

I dont use astroanalysis either (no offence anyone - that's a whole other ballgame).


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## beamstas (25 June 2009)

White_Knight said:


> Yes - and although i am a relative newbie there's a lot to be said for the use of _continuous indicators_, trend analysis etc - you can actually see it working in practice which is more than i can say for EW, which is totally ethereal in nature.
> 
> I dont use astroanalysis either (no offence anyone - that's a whole other ballgame).




All technical analysis is weakened by opinion and subject to bias.

You call yourself a newbie, but then don't want to upset other newbies with your superior opinion?


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## tech/a (25 June 2009)

dont know what all the fuss is about.
Ive been posting here and on the XAO thread.
Elliott has and is performing as expected as it has since the high in July 2007.
All my charts are posted on these threads.

Trouble I see is that 
(1) People don't understand the dynamic nature of E/W.
(2) people expect Elliott to have a finite analysis--it doesn't.
(3) People don't understand the simple rules of Elliott.
(4) People don't understand how to trade with Elliott.

Just simplify it.
Look at it in the big picture.

Kennas yes the low of lows could be in.
Kennas No the Low of lows "may not be in"
There are alternate counts and as the market develops some counts will play out and other alternatives will develop.

We can argue about correct wave counts as much as the Professional economists argue about the ACTUAL state of the world economies.
I know which analysis has been most accurate!

CLICK TO EXPAND


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## OzWaveGuy (25 June 2009)

Agreed on Tech's 4 points. Except that under EW there is a definitive set of corrective patterns and impulse patterns, which provides a useful guide to isolate the most likely pattern unfolding. It's up to the analyst to make sense of the waves (provided an understanding of EW is not an obstacle).

Yes, alternative counts are a must, esp in corrections, as they are hard to define until a substantial amount of the pattern has unfolded. Is a low in?  possible, but not ranked highly as there are more compelling counts at hand. One alternative, is a push to 4300 in the short term and invalidating the corrective expanding triangle, and introducing a expanded flat correction instead. Longer term I struggle to see that a low is in place considering the XMJ has seen 5 waves down from the high - we need to see some more downside yet.


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## tech/a (25 June 2009)

I knew that!

(5) Except that under EW there is a definitive set of corrective patterns and impulse patterns, which provides a useful guide to isolate the most likely pattern unfolding


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## MR. (25 June 2009)

kennas said:


> Is there an alternate count?'
> 
> Could the March low be THE low?
> 
> ...






tech/a said:


> Kennas yes the low of lows could be in.
> Kennas No the Low of lows "may not be in"
> There are alternate counts and as the market develops some counts will play out and other alternatives will develop.




Glad we "finally" got that all sorted out!


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## seasprite (26 June 2009)

OzWaveGuy said:


> One alternative, is a push to 4300 in the short term




1973 & 2002 saw a W correction however prior to the second V on both ocassions we seen Jake the peg's middle leg . If this is the case assuming another W may eventuate you could well be right. Is Wall St too big to fail to call a lower low?????


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## tech/a (26 June 2009)

MR. said:


> Glad we "finally" got that all sorted out!





Yeh we can talk or trade.


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## Garpal Gumnut (26 June 2009)

I take all your wise comments on counts etc., but sometimes you just have to trade and watch yer stops, too much interpretation and you end up like a fundamentalist chasing a future which may never arrive. 

gg


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## OzWaveGuy (6 July 2009)

The current wave count suggests that the XAO will soon break thru support and head further south to lower levels.


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## Chris45 (6 July 2009)

OzWaveGuy said:


> The current wave count suggests that the XAO will soon break thru support and head further south to lower levels.



And this is supported by the fact that, since the 12-June top, the SPI has been trading at a significant discount to the XJO (today 35 pts). So, the futures boyz are bearish, anyone for roast beef?


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## Garpal Gumnut (6 July 2009)

OzWaveGuy said:


> The current wave count suggests that the XAO will soon break thru support and head further south to lower levels.




Agree OWG.

I refer to previous posts on the XAO Analysis thread.

https://www.aussiestockforums.com/forums/showpost.php?p=455967&postcount=6618

gg


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## skyQuake (6 July 2009)

Chris45 said:


> And this is supported by the fact that, since the 12-June top, the SPI has been trading at a significant discount to the XJO (today 35 pts). So, the futures boyz are bearish, anyone for roast beef?




Think its more to do with upcoming divvies and adjustments made from the recent spare of corporate actions than any real bearishness. 
It does seem a bit low though, cue arb bots.


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## Boggo (6 July 2009)

Could this be a possibility, 2700 area for the *XJO* Wave 5 on a weekly chart ??

Should see 5 waves on current leg to there, we may have be in 3 of 5 ??

Any opinions ?

(click to enlarge)


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## Chris45 (7 July 2009)

Boggo said:


> Could this be a possibility, 2700 area for the *XJO* Wave 5 on a weekly chart ??



The AGET MOB has had reasonable success in this bear market - not always perfect, but not bad for an algorithm. It's suggesting we could see 2730ish in a few months time.
A 100% extension of your 1 from your 4 would give 2857 so I'd be starting to feel bullish if we got down there.


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## OzWaveGuy (7 July 2009)

Boggo said:


> Could this be a possibility, 2700 area for the *XJO* Wave 5 on a weekly chart ??
> 
> Should see 5 waves on current leg to there, we may have be in 3 of 5 ??
> 
> Any opinions ?




Although your wave count is different to mine, the 3000-2700 range is where I believe this next leg down will take us. This will most likely form a significant low.


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## Frogacle (7 July 2009)

Hello. Just had a browse through some of the charts up here. Nice work. Good to find a place where Elliott Wave is discussed.

I have a count that is similar to Boggo's, though I'm not sure w4 is complete. I think it could go a bit further. By "thinking", I mean, considering my current positions, "hoping".

I'm interested to see OWG's expanding triangle. In my (limited) experience, I've only known expanding triangles in theory, much harder to find them in practice. Also, if we are entering a (iii) of D, should the move not be larger or more well progressed at this point? Or is it possible just a smaller degree wave 1 in the larger wave (iii) move?

2700ish for a final leg down is something I guess we all concur on.

I find that having a couple of alternate counts keeps you less biased... so in that vein, a challenge: Can any of the accomplished EW guys muster an alternative count that says that the low in March was wave 5 down?


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## OzWaveGuy (21 July 2009)

The XAO has come to a pivotal juncture at today's intraday high. There is a reasonably strong case for the XAO to decline from these levels - preferably in a 5 wave decline over the next several weeks to a new low or a double bottom. This would further confirm the expanding triangle and form wave 'D'.

Whilst there is still room for some further upside in the very short term (and allowable under the current scenario shown), a number of bearish divergences on the daily and hourly charts suggest that a decline (of some form) is at hand. The evidence also points to the completion of 5 waves up (the c wave of an expanded flat) which also supports a decline. 

This suggested unfolding wave 'D' structure would be considered an elongated flat with the final part of the wave to be quite aggressive to the downside.

Reconsideration of the wave count would need to be undertaken if there is a significant break higher from the current levels.


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## Boggo (21 July 2009)

I don't subscribe to their newsletter but I get daily emails these guys. (see below)
They have made some good calls in the past and are of the belief that we haven't seen the bottom yet.

There are a lot of influential stocks on a wave 5 leg at the moment that may need a significant correction.

Just my 

_Greetings,

Why are the truly big economic catastrophes so "big"? Put simply, it's that such a small number of people prepare themselves beforehand. Think about 2008 and you'll realize it's true. What's more, once you read Bob Prechter's just-published Elliott Wave Theorist for July, you'll see that even fewer people will be ready for the soon-approaching worst leg down of the unfolding depression.

In this issue, Bob gives a warning he's never had to include in 30 years of publishing – namely, that the doors to financial safety are closing all over the world. Even as this happens, the terrible irony is that so many people believe the conventional wisdom, which claims "the worst is over."

It's not too late, but the doors really are closing shut. Learn what you need to know now. You're a few clicks away from reading your own copy of the July issue of the Elliott Wave Theorist._

http://www.elliottwave.com/


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## nunthewiser (22 July 2009)

he he he 

no offense intended


thanks for the charts / time ,....................oz wave guy


intresting


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## tech/a (22 July 2009)

> There are a lot of influential stocks on a wave 5 leg at the moment that may need a significant correction.




Confluence of a great number of stocks and indicies predate all longer term stronger moves.
This was particularly evident at the beginning of the bear market at 6880 ish.


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## brty (22 July 2009)

> Bob Prechter's just-published Elliott Wave Theorist for July, you'll see that even fewer people will be ready for the soon-approaching worst leg down of the unfolding depression.




Prechter has been predicting this since the '87 crash. I suppose if you predict it often enough eventually he'll get it right. But I'm prepared to wait another 20 odd years for it, plus another quadroupling of the DOW in the mean time.

brty


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## Sean K (25 July 2009)

OzWaveGuy said:


> Another way to interpret the recent down leg is that wave D of an expanding triangle is now underway on the XAO.
> 
> The 4079 level should not be broken in the expanding triangle scenario - if it is, then something much more complex is unfolding. The wave structure from the recent top is moving in 5 waves down, so there is supporting evidence that more downside is to follow. This supports the probability that wave 'D' down is underway.



Too early to call 'something much more complex is unfolding', or can the expanding triangle still be in play?


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## Sean K (27 July 2009)

Well, has pushed on to 4150 so 'something much more complex' is underway isn't it?

Looking forward to the alternate count OWG.


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## Sean K (29 August 2009)

Would love to see an update here.

A re-count I suppose.

Can we do that?


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## drsmith (29 August 2009)

There's an August 17 update to OWG's blog.


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## Garpal Gumnut (29 August 2009)

drsmith said:


> There's an August 17 update to OWG's blog.




Its a chilling analysis but true.

gg


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## Sean K (30 August 2009)

drsmith said:


> There's an August 17 update to OWG's blog.



Cheers, I'll check it out.

tech placed a couple in the XAO thread developed by AGET which are at odds on the daily and weekly.


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## tech/a (30 August 2009)

kennas said:


> Cheers, I'll check it out.
> 
> tech placed a couple in the XAO thread developed by AGET which are at odds on the daily and weekly.




Kenna's
They arent at odds.
Daily shows more upside is possible.
Weekly shows this as upside in a potentially bearish correction to come.

Currently.


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## amory (30 August 2009)

easier to get a clear pic from the Dow ... or is anyone still arguing that we don't follow that one?

plotting a short-term elliott where wave 1 peaked at end of june, we would now be within wave 5 ... validating Tech/a's conclusion ... upside in a potentially bearish correction to come.


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## tech/a (30 August 2009)

Overlay of DJI and XJO
DJI is Blue and Yellow
Click to expand


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## beamstas (30 August 2009)




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## OzWaveGuy (31 August 2009)

On the daily chart it appears that one more upwards thrust is required to complete the second zig-zag in a double zig-zag correction for wave 'B' circle. More on my blog.


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## ThingyMajiggy (31 August 2009)

OzWaveGuy said:


> On the daily chart it appears that one more upwards thrust is required to complete the second zig-zag in a double zig-zag correction for wave 'B' circle. More on my blog.




Is there a timeframe for this scenario to play out?? or do you get 150 years of validity or something? At what point does this become...."wrong"? Cant think of the right word.


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## nunthewiser (31 August 2009)

thanks ozwave ......... nice to see you ......hope all is well


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## OzWaveGuy (6 September 2009)

Thanks Nun, all is great

Latest EW Market update posted to the XAO thread for those interested in EW --> https://www.aussiestockforums.com/forums/showpost.php?p=484791&postcount=7480


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## OzWaveGuy (8 September 2009)

For those who are interested in EW and those who are not - there is a very good report on the EWI website that's about 118 pages in length. It covers plenty of facts and myths, backed up by charts and analysis assembled over the last few years with some new chapters. It also covers some of the facts and myths relating to what the stimulus packages are and aren't.

http://www.elliottwave.com/club/default.aspx?aid=2818

You will need to create a free account to download it


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## OzWaveGuy (9 September 2009)

OzWaveGuy said:


> Latest EW Market update posted to the XAO thread for those interested in EW --> https://www.aussiestockforums.com/forums/showpost.php?p=484791&postcount=7480




Some additional information that expands on the short term view from the Market update posted recently.


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## Jay70 (11 September 2009)

*ASX according to Elliott*

According to Elliot of which I am an avid follower and trader, my wave count has today (or early next week) has excellent potential to be an important high in this bear market correction. Price and time both seem to be coinciding perfectly.

The chart shows my wave count of the entire down move and my belief that we are at the completion point of wave 4 (corrective wave) with wave 5 down due to commence. Wave 5 is the final move to this down move which is likely to conclude before April 2010 and potentially before end of Dec 09'. There is a target on the SPI 200 at 4638 for conclusion of this W4 which I have been eyeing for some time.

Before the down move started bullish sentiment was at 96%,  at the low in March it was at 3%. Apparently bullish sentiment is again at around 90%.

It's hard to believe people actually believe the down turn is over and it's happy days again. The fundamental reason that triggers the sell off when it comes is secondary to the ability of the Elliot principal to capture the predictability of crowd behaviour.

I'll be looking to some good buying on completion of W5 and holding long term while the next real major bull market emerges. 

This is just another opinion and time will reveal all. 

Good trading


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## Sean K (11 September 2009)

*Re: ASX according to Elliot*

Jay, there's already an XAO and EW thread. We'll move this across there shortly. kennas


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## Jay70 (14 September 2009)

*Re: Elliott Wave and the XAO - W4 (suckers rally) complete.*

On Friday I posted a wave count showing a zz target to 4638 on the spi 200 which was identified some 2 months ago as being a good completion point for this corrective W4; on Sycom we reached 4625 which is close enough for me on this time frame.
The S&P500 is also in the same position with wave c of the zz projecting 61.8% of wave A on Friday. Time also seems spot on, I’m no Gann expert but we’re 6 months from the March low or 180 degrees (50%). The next wave 5 down could expect to be complete in March 2010. 

If you were a seller above 4600 with a stop some 50 points higher you are in a good position with an excellent risk / reward trade. If you’re not short yet the best move now is to wait until we break strong support around 4500 level. Give plenty of room for noise, the commercials will do their best and take every opportunity to continually shake out weak shorts. The likely move today is a drop from open as the commercials trap all the longs up high. Trading below 4500 is the first confirmation the high is in. The real test will come when / if we reach the strong support around the 4000 mark. A break here is the real confirmation and when all the tech guys will start going short (better late than never).

As most of us know wave 4 is otherwise known as a suckers rally, where people are quick to jump back in the market with the fear of missing the next major bull market (or up move) or chasing losses just like R8 on race day. Ironically it’s these same people (90 odd percent of all participants in this instance) that will soon become the sellers and drive the last capitulation leg down (wave 5). The commercials without a doubt have been selling onto the height of this optimism after being the buyers that started it. 

Wave 5 has the potential to go as low as 2600 on the spi, and on the S&P 500 as low as 300. The S&P has a massive double top on the largest time frame and all the technical traders (which I used to be) will know that the most common action proceeding a double top is for price to return to where the up move first started. (coincidentally around 300 level). In Elliot price needs to at least retrace 70% (my experience is 61.8%) of w4 before being deemed a failure but looking at the overall wave structure it’s more likely to extend beyond the March lows.  

Bear market bottoms on this time frame (1 in 100 yr event) can only be found when people have been so badly burnt that they just give up, they dare not step back into the market. Sentiment becomes balanced, neither bullish or bearish. (sentiment = 93% Bullish before the drop commenced / 97% Bearish in March 09 / nearly 90% bullish last week). 

The good news is that when W5 is complete the real opportunity presents itself to start buying and place yourself well for the next “real” bull market when it emerges. We have undoubtedly tough times ahead and the full economic and financial fall out won’t take grip until after the markets bottom. Knowledge can place you in good stead to deal with this.

Happy trading


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## Jay70 (16 September 2009)

Update

On the spi200 price action has been rammed up this morning. This is a typical play by the commercials to achieve a high price near contract end. This is more often a good quick profitable trade if you can pick it. I call it legalised theft.

As I type this price is near it's highs (at 4643) and has irronically come within 5points of the large zig zag target at 4638 on extremely high volume and a tripple zz since open on 1 min data. This is a critical point for my large wave count and another good sell if you're game enough. All the weak shorts have now been forced to cover. Don't be surprised to see price action to now start falling away for the rest of the day with the possibility of taking out the day lows near the close leaving an excellent reversal.

If price goes much higher than the current high at 4643 and the larger Elliot count I have been discussing becomes negated, for now nothing has changed and a good entry with low risk can been made.

Good Trading


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## Boggo (16 September 2009)

I did this on the daily XJO chart for my own exercise on the 10th. One way of looking at the current situation I suppose.

(click to expand)


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## Chris45 (16 September 2009)

EW skeptics will not be interested in this so just move on...

EWI is having another FreeWeek starting noon Wednesday, Sept. 16 (USA time) and ending noon Wednesday, Sept. 23. This FreeWeek throws open the doors to EWI's Asian-Pacific and European Short Term Updates.

Could be interesting to see what they have to say about our XAO.


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## Jay70 (16 September 2009)

We have differing count starting in W3 and you have 5 completed. The completion of W3 and 5 seem to quick for mine. W4's are normally longer in time than 2. Also note the correlation in retracements so far with W2 and 4. W4 in my count certainly has potential to go further, this just seems the best place in price and time. It's all interesting but time will reveal all.

See attachment - click to enlarge

Attachment


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## Chris45 (16 September 2009)

Some simple observations on the XJO, just to add to the fun and confusion:

W1 (3500.7) = 379.9 pts
W3 (4079.4) = 623.2 pts ~ 1.62*W1
W4 (3709.2) = 370.2 pts ~ 0.62*W3 (and ~ W1)
W5 target: 3709.2 + 2.618*W1 = *4704*
The 1.000 level (4089) and 1.618 level (4324) seemed to be resistance. 4089 ~ W3 high. 4323 ~ Nov high.

Alternatively:
WA (4079.4) = 958.6 pts
WB (3709.2) = 370.2 pts ~ 0.38*WA
WC target: 3709.2 + 958.6 = *4668*

Anticipated resistance at 4670 - 4700 maybe?


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## OzWaveGuy (16 September 2009)

Chris45 said:


> Some simple observations on the XJO, just to add to the fun and confusion:
> 
> W1 (3500.7) = 379.9 pts
> W3 (4079.4) = 623.2 pts ~ 1.62*W1
> ...




Shouldn't be too far off now. The final push upwards started on the 7th and is maybe about 1/3rd complete, so there's probably a couple more weeks left in it.


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## OzWaveGuy (16 September 2009)

Chris45 said:


> EW skeptics will not be interested in this so just move on...
> 
> EWI is having another FreeWeek starting noon Wednesday, Sept. 16 (USA time) and ending noon Wednesday, Sept. 23. This FreeWeek throws open the doors to EWI's Asian-Pacific and European Short Term Updates.
> 
> Could be interesting to see what they have to say about our XAO.




Just point them to the EW debate thread, it's good for a laugh 

Thanks for the heads up on EWI free week


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## Chris45 (16 September 2009)

OzWaveGuy said:


> Just point them to the EW debate thread, it's good for a laugh



Better entertainment than anything TV has to offer. 



> Thanks for the heads up on EWI free week




Cheers OWG.  I'm just wondering when all of these irrational bulls are going to realize that the world is stuffed.

The environment is stuffed, the economy is stuffed, we’re all stuffed!!!

Then the mother of all fifth waves or C waves will commence and lead to the total collapse of our financial house of cards.

Gee, I think I'm starting to sound a bit bearish. Must have been listening too much to Marc Faber.


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## professor_frink (16 September 2009)

feel free to debate the merits of EW in the EW debate tread.

It's not appropriate to turn every single thread on ASF that mentions Elliot wave into a debate/argument.

Any further posts along these lines in this thread(or in any other thread other than the EW debate thread) will be deleted and infractions issued.


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## Bobby (16 September 2009)

professor_frink said:


> feel free to debate the merits of EW in the EW debate tread.
> 
> It's not appropriate to turn every single thread on ASF that mentions Elliot wave into a debate/argument.
> 
> Any further posts along these lines in this thread(or in any other thread other than the EW debate thread) will be deleted and infractions issued.




Professor , if this is off your own back , your walking a very fine line , the strength of Aussie Stock Forums is free rebate on any thread within the established set rules !
 .:frown:


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## professor_frink (16 September 2009)

Bobby said:


> Professor , if this is off your own back , your walking a very fine line , the strength of Aussie Stock Forums is free rebate on any thread within the established set rules !
> .:frown:




rubbish.

If you want to debate the merits of EW, do it in the appropriate thread.

No further debate on this one. I'm quite sure Joe will be fine with the stand I'm taking here. Feel free to take it up with him if you don't like the way I'm going though


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## Joe Blow (16 September 2009)

Bobby said:


> Professor , if this is off your own back , your walking a very fine line , the strength of Aussie Stock Forums is free rebate on any thread within the established set rules !
> .:frown:




Bobby,

I agree with Professor Frink.

We already have a thread for debating the validity of EW. If we let every thread on EW get sidetracked with debates over its validity then we'll never have an EW thread that will be anything other than one long argument. 

I don't think that's very productive.

Anyone interested in debating the validity of EW can do so here: https://www.aussiestockforums.com/forums/showthread.php?t=17069


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## nunthewiser (16 September 2009)

so if something is posted in one of the 300 EW threads here that sounds like utter bollocks or more hindsight greatness which has no validility we have to take it to another thread to point it out ?


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## professor_frink (16 September 2009)

nunthewiser said:


> so if something is posted in one of the 300 EW threads here that sounds like utter bollocks or more hindsight greatness which has no validility we have to take it to another thread to point it out ?




yes.


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## Joe Blow (16 September 2009)

nunthewiser said:


> so if something is posted in one of the 300 EW threads here that sounds like utter bollocks or more hindsight greatness which has no validility we have to take it to another thread to point it out ?




Nun, I can't see the point in disrupting every thread. 

I think EW practitioners should be able to carry on a reasonable discussion with other EW practioners without being constantly told that their method is bollocks.

If you wish to criticise something someone has said in an EW thread then repost it in the EW debate thread, but let's not destory every EW thread. As I said, I don't see the point.

I like threads that stay on topic. It means they might actually be useful to someone else one day. Lets face it, the argument over the validity or otherwise of EW will never be settled, so I think we should keep it to the one thread.


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## nunthewiser (16 September 2009)

fair enough Joe 

no worries


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## OzWaveGuy (16 September 2009)

nunthewiser said:


> so if something is posted in one of the 300 EW threads here that sounds like utter bollocks or more hindsight greatness which has no validility we have to take it to another thread to point it out ?




To be brutally honest, you've inserted your repetitive arguments into everyone one of those 300 threads. You've made your thoughts clear on EW, so now let the folks who enjoy the analysis get something from it.

If you want to ask rational questions, search the 300 threads for an answer, if you can't find it feel free or PM the author or post a sensible question.


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## Bobby (16 September 2009)

Joe Blow said:


> Bobby,
> 
> I agree with Professor Frink.
> 
> ...




 Joe , suggest then that certain threads have a ( don't post negative opinion ~ status ) ,  direction " prescient be so then


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## Jay70 (17 September 2009)

Why do those not interested in Elliot Wave bother to read this thread or at least, bother to reply unless with a constructive question. I was once only technical orientated trader who also couldn't see the benefit of Elliot or how to trade it for profit. 

Back to the market. Chris, I guess it's fair to say we are in agreement with looking for completion of this C wave........there seem to be quite a few possible targets very close. If the take off point for C is used on SPI200 we get 4665 on day data only. Either way on this large time frame I still have no reason but to stick with exiting all longs and setting up short. 

I have 3 coninciding reasons to be looking for a top up here;
1. C wave looking for completion 

2. In time Gann is still in the window of seasonal change

3. Yesterdays action was typical of a market looking for a high.

4. Price now is expected to be maintained into contract close so the fund managers etc. get their bonuses. (nothing has changed)  

5. Bullish sentiment is extremely high again.

I'm still set short and leaving plenty of room for noise. Minimum down side target / reward is over 400 hundred points. (With potential for plenty more)


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## Chris45 (17 September 2009)

professor_frink said:


> Any further posts along these lines in this thread(or in any other thread other than the EW debate thread) will be deleted and infractions issued.



It was a tongue-in-cheek comment guys ... or did I miss something while I was away having dinner?


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## Chris45 (17 September 2009)

Jay70 said:


> 5. Bullish sentiment is extremely high again.




Thanks Jay. Must confess that after the recent market action I'm getting a very strong urge to invest again. I usually get these thoughts just before a major top (eg Jan-94).


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## OzWaveGuy (17 September 2009)

Chris45 said:


> Thanks Jay. Must confess that after the recent market action I'm getting a very strong urge to invest again. I usually get these thoughts just before a major top (eg Jan-94).




Optimism moving to extreme levels perhaps? I've posted this https://www.aussiestockforums.com/forums/showpost.php?p=488966&postcount=731 in the general EW thread that relates to Chris's post.


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## Awesomandy (17 September 2009)

Chris45 said:


> Thanks Jay. Must confess that after the recent market action I'm getting a very strong urge to invest again. I usually get these thoughts just before a major top (eg Jan-94).




Isn't that pretty much textbook wave 5 or wave C psychology (depending on the actual cycle)?


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## Chris45 (17 September 2009)

Awesomandy said:


> Isn't that pretty much textbook wave 5 or wave C psychology (depending on the actual cycle)?



I think you're right and my simple Fib targets have been thoroughly trampled by this stampede. The bulls are certainly having a great run and more and more bears seem to be capitulating so either, a top of some sort is near, or "this time it's different". The rate of increase of this market is reminiscent of the post 87 crash period so I think I'll continue to sit on my hands and see what happens when we get to 5000. I'm very interested to hear what the EW skeptics anticipate for the future and hope they post in the other XAO thread.


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## Timmy (17 September 2009)

There is plenty of prediction going on, on any number of threads.  Let's keep this thread free for the EW practitioners to discuss EW, any queries about the methods of others are to be addressed in alternative threads please.


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## Jay70 (17 September 2009)

Awesomandy said:


> Isn't that pretty much textbook wave 5 or wave C psychology (depending on the actual cycle)?





Exactly. If you look at intraday data there was a very strong impulse wave starting yesterday with wave 4 completing this morning and W5 blowing out and completing before lunch. A good quick intra day trade but for the longer term it's my experience that most trends complete with a quick blow off impulse wave, like we just have seen.

There couldn't be to many retail shorts game enough to go short in this market, I'm quite confident the commercials are leverged short after all that action. They however have deep pockets and can keep selling and churning into a rising market. 

I have increased my long term shorts with the completion of that impulse wave. The next couple of days will tell whether I run for the exit door or have captured a good entry.


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## OzWaveGuy (18 September 2009)

Chris45 said:


> EWI is having another FreeWeek starting noon Wednesday, Sept. 16 (USA time) and ending noon Wednesday, Sept. 23. This FreeWeek throws open the doors to EWI's Asian-Pacific and European Short Term Updates.
> 
> Could be interesting to see what they have to say about our XAO.




Their assessment of the XAO is very similar to many of the views here. Their ASX chart shows a 3 wave corrective move from the lows with an intervening 'X' wave, terminating at around 4800-4900.


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## Jay70 (18 September 2009)

*Re: SPI 200 on daily chart*

Attached is a day chart (click to expand) showing the Zig Zag correction. The first confirmation required of a possible important top would be a break of the lower blue channel line. Today this sits just above 4600. 

Todays expected action on the spi is a sell off from near open. I wouldn't be surprised to see a weak open below 4700 leaving an exhaustion gap in technical terms. The alternative is the gap becomes a break away but in my book given the timing this is unlikely.

If we break the 4600 mark it will be interesting to see if the market can break through the Fib. retracements in days to come. A break of the lower support line would be final confirmation, if it's going to come it will likely be during the next reporting period in October.

I'm quite comfortable being short but for now it's just sit and watch what unfolds. A impulse wave 1 down to the lower support line is the expected price action over the next couple of weeks.This would also confirm the trend is still down.

This, if nothing else will be interesting.


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## Chris45 (18 September 2009)

Jay, I agree with you that the correction could well be complete and my thinking is similar to yours re that lower support line. FWIW, we are close to the Spring equinox.

I’m still in learning mode but if we break below it, I’ll be tempted to try an AGET “Type 2” trade (selling at the end of a Fifth Wave rally). Of course, that will be a signal for everyone else to buy. 

That 2.618 target now doesn’t look so bad and those smart enough to have bought around 3850 (wish I was one of them) could have made a profit of about $850 per IQ CFD. (Of course those who bought around 3200 are even smarter!)

As OWG pointed out, EWI have a target of about 4900 and they think we might have just completed a third wave within their wave C with more upside to come. I’m not so sure about that but, as always, time will tell.


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## Jay70 (18 September 2009)

Chris45 said:


> Jay, I agree with you that the correction could well be complete and my thinking is similar to yours re that lower support line. FWIW, we are close to the Spring equinox.
> 
> I’m still in learning mode but if we break below it, I’ll be tempted to try an AGET “Type 2” trade (selling at the end of a Fifth Wave rally). Of course, that will be a signal for everyone else to buy.
> 
> ...





Chris you might be right with that 3rd wave. I'll be closing shorts now if we retrace this recent down move by more than 61.8% and looking to short again higher. I think the key is what happens tonight. The uS does have some catching up to do compared to most other countries.


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## Garpal Gumnut (18 September 2009)

I find the short term analysis of EW confusing.

I mainly use it on long term monthly charts.

I'm still pessimistic on "the recovery" and "the recession" being over.

So looking at long term support/resistance lines and running a fibonnaci retracement from the madness of the recent bull high, I posit that we are at the top of a 4th wave, and that the fifth will commence come october, and finish at 1800 on the xao.

The blue sky that went up from 2004 to the recent highs will not be equalled for another 7 or 8 years if you run a trend line from the lows of 1992 through the lows of 2000-2003.

I'm on this wave 4 with extremely close stops.

A recovery it ain't.

Maybe we'll not hit 1800, more likely 2400, but as for 5200 or 6800, forget it.

gg


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## johnnyg (18 September 2009)

I'd be interested in what sort of news event is going to be required to create a drop to 2400 or lower. The US market is continuing to shrug off bad news, so whats it going to take to see a massive change in the crowd psychology?


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## Garpal Gumnut (18 September 2009)

johnnyg said:


> I'd be interested in what sort of news event is going to be required to create a drop to 2400 or lower. The US market is continuing to shrug off bad news, so whats it going to take to see a massive change in the crowd psychology?




I'm a chartist mate not a funnymentalist, but .. Obama gets shot, BinLaden gets the Pakistan Atom Bomb, Some flu or other virus takes out 2 billion consumers, China decides to go back to Maoism, meteorite wipes out Texas, who knows.

gg


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## skc (18 September 2009)

Is it at all possible that the fall from 6800 to 3100 (range = 3700. duration ~15 months) was in fact a protracted wave 1, and we are now in the counter trend wave 2? Assume this wave 2 goes for 50-61.8% of wave 1, that would imply an end of the recent rally at 4950 to 5400, by end of this year. Is that even a plausible scenario?



johnnyg said:


> I'd be interested in what sort of news event is going to be required to create a drop to 2400 or lower. The US market is continuing to shrug off bad news, so whats it going to take to see a massive change in the crowd psychology?




USA defaulting on its treasuries would be a good one. Probably not gonna happen for a couple of years, however.


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## Garpal Gumnut (18 September 2009)

skc said:


> Is it at all possible that the fall from 6800 to 3100 (range = 3700. duration ~15 months) was in fact a protracted wave 1, and we are now in the counter trend wave 2? Assume this wave 2 goes for 50-61.8% of wave 1, that would imply an end of the recent rally at 4950 to 5400, by end of this year. Is that even a plausible scenario?




I'm no expert on EW, but yes your scenario is correct , each wave can be reduced to a further ew pattern, but I'm unsure if we can do so with 2 waves.

We need tech/a to expand. 

gg


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## professor_frink (18 September 2009)

More related to the US markets than then XAO, but is interesting to note that Glenn Neely has finally flipped his opinion and said he's not expecting new lows now. He's now saying it's quite possible a contracting triangle will form from here until 2012 and end at a higher point than this year's lows. If this is the case, then he expects that the lows from earlier this year won't be breached again ever(well he said for the next 50 years but it might as well be the same thing for most adults currently around!).


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## Garpal Gumnut (18 September 2009)

professor_frink said:


> More related to the US markets than then XAO, but is interesting to note that Glenn Neely has finally flipped his opinion and said he's not expecting new lows now. He's now saying it's quite possible a contracting triangle will form from here until 2012 and end at a higher point than this year's lows. If this is the case, then he expects that the lows from earlier this year won't be breached again ever(well he said for the next 50 years but it might as well be the same thing for most adults currently around!).




Prof can you expand with a chart

gg


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## professor_frink (18 September 2009)

Garpal Gumnut said:


> Prof can you expand with a chart
> 
> gg




here you go gg


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## OzWaveGuy (18 September 2009)

johnnyg said:


> I'd be interested in what sort of news event is going to be required to create a drop to 2400 or lower. The US market is continuing to shrug off bad news, so whats it going to take to see a massive change in the crowd psychology?




Bad news or Good News - it won't matter. In bull markets, bad news is simply shrugged off, and in bear markets the good news is shrugged off. The psychology of the crowd is in the driving seat.


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## johnnyg (19 September 2009)

OzWaveGuy said:


> Bad news or Good News - it won't matter. In bull markets, bad news is simply shrugged off, and in bear markets the good news is shrugged off. The psychology of the crowd is in the driving seat.




So we are in a new bull market then?


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## johnnyg (19 September 2009)

Garpal Gumnut said:


> I'm a chartist mate not a funnymentalist, but .. Obama gets shot, BinLaden gets the Pakistan Atom Bomb, Some flu or other virus takes out 2 billion consumers, China decides to go back to Maoism, meteorite wipes out Texas, who knows.
> 
> gg




So your saying that some major news event must take place for your 2400 target to into fruition?


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## Nick Radge (19 September 2009)

The triangle scenario has been in play for 2-years in my opinion. Here is a report I wrote in March 2007, page 6 specifically looks at the triangle:

March 2007 - A Major Top

And updated again in March 2009:

March 2009 - A Major Low

Nick


_This post may contain advice that has been prepared by Reef Capital Coaching ABN 24 092 309 978 (“RCC”) and is general advice and does not take account of your objectives, financial situation or needs. Before acting on this general advice you should therefore consider the appropriateness of the advice having regard to your situation. We recommend you obtain financial, legal and taxation advice before making any financial investment decision._


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## Wysiwyg (19 September 2009)

Nick Radge said:


> The triangle scenario has been in play for 2-years in my opinion. Here is a report I wrote in March 2007, page 6 specifically looks at the triangle:
> 
> And updated again in March 2009:
> 
> ...




Greetings Mr. Radge, 

In your report I notice a chart projecting a March 2009 low revisited around 2011-2012. On what fundamental basis would this happen or is this projection based solely on a longer term period of consolidation (triangle)?


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## Jay70 (20 September 2009)

Chris45 said:


> Jay, I agree with you that the correction could well be complete and my thinking is similar to yours re that lower support line. FWIW, we are close to the Spring equinox.
> 
> I’m still in learning mode but if we break below it, I’ll be tempted to try an AGET “Type 2” trade (selling at the end of a Fifth Wave rally). Of course, that will be a signal for everyone else to buy.
> 
> ...






Attached is a snap shot of 60 min data on the Dec spi (incl Sycom on Friday night) showing the possible start of a W3 which will likely take us through the support at the 4600 area on Monday sometime. This will be the first confirmation the high is in. 

Putting all analysis aside one reason I don't think we'll see 4900 or higher and 10,000 on the Dow is simply because everyone is sitting on their hands thinking it's a given. If I were a institutional trader I'd be off loading and reversing below these levels. And from what I'm seeing this is exactly what they have been doing.


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## Nick Radge (20 September 2009)

> If I were a institutional trader I'd be off loading and reversing below these levels. And from what I'm seeing this is exactly what they have been doing.




Fridays closing auction doesn't support that immediate view. $2 billion worth of stock changed hands in the closing auction which is huge. This is also coupled with quite a strong close. Both point to buyer demand.


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## Sean K (20 September 2009)

Nick Radge said:


> Fridays closing auction doesn't support that immediate view. $2 billion worth of stock changed hands in the closing auction which is huge. This is also coupled with quite a strong close. Both point to buyer demand.



Nick, I can't trace the quote. Where is it from?


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## Jay70 (20 September 2009)

Nick Radge said:


> Fridays closing auction doesn't support that immediate view. $2 billion worth of stock changed hands in the closing auction which is huge. This is also coupled with quite a strong close. Both point to buyer demand.





Nick, the big question for mine is who were the buyers and who were the sellers. The spi 200 only closed 12 points above it's low. It dropped 30 points in the last 30 minutes.


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## Nick Radge (20 September 2009)

kennas,
the post above mine.

The last 30 mins of SPI trading is a pointless guide as its a very illiquid perod of time after the arbs have left the room. Most liquidity going through is punters rather than the serious boys. 

Alas, we shall see in due course!


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## tech/a (20 September 2009)

In case Kenna's didnt see it.


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## Wysiwyg (20 September 2009)

Wysiwyg said:


> Greetings Mr. Radge,
> 
> In your report I notice a chart projecting a March 2009 low revisited around 2011-2012. On what fundamental basis would this happen or is this projection based solely on a longer term period of consolidation (triangle)?





Okay, I get the gist of these projections. One of multiple scenarios that `could` unfold in a time frame beyond anyones knowing. Fantastic stuff.


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## skyQuake (20 September 2009)

Nick, I see a lot of volume and size gets done post cash close, its more volatile than illiquid imo; why do u say its mostly punters? I always thought day SPI is too thin to do real vol and funds would come out then.
cheers.


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## Sean K (21 September 2009)

Nick Radge said:


> kennas,
> the post above mine.





tech/a said:


> In case Kenna's didnt see it.



 Oh dear. 

Thanks for pointing that out. 

:couch


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## wayneL (21 September 2009)

tech/a said:


> In case Kenna*'*s didnt see it.




Are you secretly really a grocer?


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## Jay70 (21 September 2009)

Nick Radge said:


> kennas,
> the post above mine.
> 
> The last 30 mins of SPI trading is a pointless guide as its a very illiquid perod of time after the arbs have left the room. Most liquidity going through is punters rather than the serious boys.
> ...




I disagree Nick, the commercials control the spi right into close and through the night (when they need to). A percieved strong close is likely to be nothing more than the big boys (Banks) churning the market. I know for a fact their typical play is to buy or sell their own physical stock while taking the opposite position on the futures market. Then reversing their position on the physical. The banks are big enough to move the whole market where they want on the smaller time frame and they collude with each other. i.e. MBA and USB were always working together.


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## nunthewiser (21 September 2009)

FWIW 

i should point out that the big 4 are down today


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## OzWaveGuy (21 September 2009)

It's good to see the EW thread(s) getting back to normal (finally) 

Today may be appropriate to highlight what some may consider to be a small triangle that has unfolded (at least so far, could still be more to come) on the XAO. In terms of the larger wave count I've been following here --> https://www.aussiestockforums.com/forums/showpost.php?p=486148&postcount=94 , this triangle may be a significant  indicator for the potential completion of the bear market rally (or one significant leg of it).

The 4935ish area still holds some significance for me as there are some short term fib ratios that are hit based on the current wave count (as shown). Since the small wave (iii) is longer than wave (i), it's possible for this final wave (v) to be longer than (i) and (iii). The next 5 or so trading days should certainly reveal more of the unfolding wave count.


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## Chris45 (21 September 2009)

OzWaveGuy said:


> It's good to see the EW thread(s) getting back to normal (finally)



Shhhhh! Is that the pitter patter of little troll hooves I hear in the distance?


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## Nick Radge (21 September 2009)

> Okay, I get the gist of these projections. One of multiple scenarios that `could` unfold in a time frame beyond anyones knowing. Fantastic stuff.




Its not about knowing or projecting. Its about assessing past price patterns and what '_*usually*_' follows. In March 2007, '_*what usually follows*_' is a significant correction. If you take the time to look at my charts of that 2007 report that correction basically tagged the level we were expecting.

The rhetoric I hammered home at the March 2009 lows was "don't be a dick for a tick" meaning 100-pts here or there was not important to the bigger scheme of things.

The bigger scheme of things pattern '_*that usually follows*_' such a decline was a counter trend rally toward 5000 - 5500. 

It is not my intent to convert anyone to EW.


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## nunthewiser (21 September 2009)

OzWaveGuy said:


> It's good to see the EW thread(s) getting back to normal (finally)
> 
> Today may be appropriate to highlight what some may consider to be a small triangle that has unfolded (at least so far, could still be more to come) on the XAO. In terms of the larger wave count I've been following here --> https://www.aussiestockforums.com/forums/showpost.php?p=486148&postcount=94 , this triangle may be a significant  indicator for the potential completion of the bear market rally (or one significant leg of it).
> 
> The 4935ish area still holds some significance for me as there are some short term fib ratios that are hit based on the current wave count (as shown). Since the small wave (iii) is longer than wave (i), it's possible for this final wave (v) to be longer than (i) and (iii). The next 5 or so trading days should certainly reveal more of the unfolding wave count.




so by that chart posted you are calling today as the base for the current retractment and calling it up from here 

intresting stuff as it is yet again the complete opposite to my analysis in the XAO thread where i have pointed out my targets i am expecting to reach this week ..

are you trading this ?

intresting to see what unfolds here


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## Jay70 (21 September 2009)

Nick Radge said:


> Its not about knowing or projecting. Its about assessing past price patterns and what '_*usually*_' follows. In March 2007, '_*what usually follows*_' is a significant correction. If you take the time to look at my charts of that 2007 report that correction basically tagged the level we were expecting.
> 
> The rhetoric I hammered home at the March 2009 lows was "don't be a dick for a tick" meaning 100-pts here or there was not important to the bigger scheme of things.
> 
> ...






Nick I agree with your analagy of the use of Elliot Wave and like all forms of analysis there are always different interpretations. Trading is more about managing risk than anything else.

Attached is a chart I posted over a week ago which is now calling for the possible W4 top to be in. Note the Fib retracement is in an excellent position to see this top (assuming my count is correct). I also like to look for important seaonal Gann windows where a trend change is expected. Coincidentally he has a strong seasonal time mid to late Sept. or 180 degrees (days) from the previous low. Like they say "timing is everything".

Todays noticable action on the spi looked like a squeeze into the close by the commercials to steal shorts, I was expecting more weakness. The US tonight could provide the first key as to where this market is at. 

Now I'll be looking to technical support levels for first confirmation the W4 high could be in. Tomorrow the strong rising support on day data (on spi) is 4615. A wise and reputable Gann  trader once told me "if support / resistance is tested for a 4th time it will nearly always go through". (i think the % was something like 90%) The next test of this line will be the fourth when it happens.


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## Jay70 (22 September 2009)

The attached chart of spi 200 (30 min) showing a potential zig zag to 4880 (this is right on 61.8% retracement of wave 3 on my chart)

If it fails and falls below 4826 (61.8%)  the likely action for mine is a tank through the support levels. Above the resistance line it should start to run.

A good low risk trade if your bullish with a stop below the 4826 or last nights lows at 4855.


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## OzWaveGuy (29 September 2009)

An incremental update to https://www.aussiestockforums.com/forums/showpost.php?p=490702&postcount=153

Note that the outlined target(s) could easily fail depending on the very short term wave counts that unfold. Simply using Fib and a EW channel to plot out a potential end of wave (v).


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## Jay70 (2 October 2009)

The last 10 days has seen little of nothing apart from distribution opportunities for the commercials. Being short in waiting for the next larger move has been trying until now.

However the day chart of SPI200 attached has labelled yesterdays high as the take off point and W4 completion with the US action confirming this last night. These same waves mirrored on the XAO have an abc zig zag completing within 11 points over the entire up move. 

Other confirming factors giving confidence in the labelling of the W4 completion is the outside day on the 23/9 on the S&P 500 which ironically is one of Ganns most important seasonal dates for trend change.(according to the late Neil Costa) 
The speed of the up move is also typical W4 characteristics.

The wkly chart attached is simply the same chart as posted 3 weeks ago which was looking for the wave 4 completion. Now in.

Now we have some breathing space to sit back and continue to analyse the down move as it unfolds. I'm looking for an impulse wave or tripple zig zag to form and take out the March lows before April 2010. The main indication to void this labelling now will be up waves which exceed what is acceptable to an impulse wave down. Obviously the important technical support levels will be watched and will likely provide the basis of some of the corrective up waves within the larger down move.


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## Jay70 (6 October 2009)

The attached is a 30 min chart of the spi200 showing labeling of a possible     W3 down just commenced. Note the corrective abc (zig zag) that has formed over the past 2 days. This wave 3 has a completion target at around 4288. W5 could then take us lower to complete near a strong channel line. Assuming this unfolds the whole move would then be labelled W1 of the larger down move with a W2 bounce then expected. 

If the whole move plays out and the impulse wave is clear cut this would be a good clue that the larger move is still down. From my observations and understanding of Elliot all down moves in bull markets are corrective in behaviour and visa versa in Bear markets. Lets see what unfolds.

I am having a problem with my text tool on the software so apologies if you find it difficult to read.


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## OzWaveGuy (13 October 2009)

Updating from https://www.aussiestockforums.com/forums/showpost.php?p=494124&postcount=159

The XAO continues to climb towards 5000, and the recent wave action implies that a subdivision of wave 'c' circle is unfolding (v's a 5th wave extension indicated in my last post) that has potential to push the index to 5000 and slightly beyond.


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## tech/a (13 October 2009)

Jay70 said:


> The attached is a 30 min chart of the spi200 showing labeling of a possible     W3 down just commenced. Note the corrective abc (zig zag) that has formed over the past 2 days. This wave 3 has a completion target at around 4288. W5 could then take us lower to complete near a strong channel line. Assuming this unfolds the whole move would then be labelled W1 of the larger down move with a W2 bounce then expected.
> 
> If the whole move plays out and the impulse wave is clear cut this would be a good clue that the larger move is still down. From my observations and understanding of Elliot all down moves in bull markets are corrective in behaviour and visa versa in Bear markets. Lets see what unfolds.
> 
> I am having a problem with my text tool on the software so apologies if you find it difficult to read.




Interesting Count?
May need to do a little work on your application.


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## OzWaveGuy (20 October 2009)

A further update to - https://www.aussiestockforums.com/forums/showpost.php?p=499165&postcount=162

The XAO is still unfolding upwards, almost hitting 4900 last Thursday before correcting. I'm going to assume the activity since Thursday is a wave (iv) triangle, and if correct, will be a solid indicator for the upcoming end of wave 'c' circle.

Many have been bearish on stocks for October, but with only several trading days left, it'll be a stretch to see the start of a potential decline. November may be more rewarding for the bears.


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## OzWaveGuy (23 October 2009)

Not a significant amount of change since the last post above https://www.aussiestockforums.com/forums/showpost.php?p=501832&postcount=164

The XAO still correcting sideways in what is most likely a 4th wave triangle, there is an argument that the triangle is close to completion. Ideally, I'd like to see more development or alternatively a confident break above 4900 to enter wave (v) or possibly a further sub-division (this would of course invalidate the triangle).


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## Chris45 (23 October 2009)

This is getting really interesting! Gurus are predicting an Oct top. In early Oct-89 we had a little triangle which became a top. Twenty years on we now have another Oct triangle. Next week will be nail biting! OWG, your work is much appreciated.


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## OzWaveGuy (26 October 2009)

Chris45 said:


> This is getting really interesting! Gurus are predicting an Oct top. In early Oct-89 we had a little triangle which became a top. Twenty years on we now have another Oct triangle. Next week will be nail biting! OWG, your work is much appreciated.




Thanks Chris. I'm not sure which Guru's are predicting a Top soon, but I'm sure there's a number of folks questioning the validity of the rally. I also know EWI have been warning of an impending top in recent weeks.

Today's action seems to imply that further sideways action is required on the unfolding wave (iv) triangle scenario discussed in the previous posts --> https://www.aussiestockforums.com/forums/showpost.php?p=502819&postcount=165

I've painted a rough picture of what could be unfolding in the immediate short term below, wave 'b' of the triangle may still be under development....


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## zacaxel1975 (26 October 2009)

Is this still a corrective wave four before the wave five down to new lows? What level would this push up have to reach before it cannot be considered a wave four anymore?

Is there any EW charts that fit with the March low being the end of a fifth wave?

Just scratching the surface looking at this all myself and thought I would ask those who know about this.

Thanks


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## OzWaveGuy (27 October 2009)

zacaxel1975 said:


> Is this still a corrective wave four before the wave five down to new lows? What level would this push up have to reach before it cannot be considered a wave four anymore?
> 
> Is there any EW charts that fit with the March low being the end of a fifth wave?
> 
> ...




As discussed in early Sept https://www.aussiestockforums.com/forums/showpost.php?p=484791&postcount=7480


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## thresher (27 October 2009)

OzWaveGuy said:


> Today's action seems to imply that further sideways action is required on the unfolding wave (iv) triangle scenario discussed in the previous posts -->




Hi OWG

Thanks for your posts. If price was to drop below wave (i) before completing wave (iv) would this count still be valid? 

Regards
t


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## zacaxel1975 (27 October 2009)

OzWaveGuy said:


> As discussed in early Sept https://www.aussiestockforums.com/forums/showpost.php?p=484791&postcount=7480




Thanks OWG, just what I was looking for.


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## OzWaveGuy (27 October 2009)

thresher said:


> Hi OWG
> 
> Thanks for your posts. If price was to drop below wave (i) before completing wave (iv) would this count still be valid?
> 
> ...




In the early morning trade, I could see that when the XAO came close to the top of wave (i), I knew the triangle was going to invalidated today - which it was.  So you're spot on thresher - Wave 4's can never overlap the price range of wave 2's.

I've also had one eye on the XMJ, and that hasn't being playing out with the proposed ending structure on the XAO either. 

Re-evaluation of the short term wave count is necessary. One solid probability is an ending Diagonal, which means wave 4 *must* overlap wave 2, and *all waves must* contain 3 wave moves. Ending diagonals appear in wave 5's and wave c's.

In my last post https://www.aussiestockforums.com/forums/showpost.php?p=503758&postcount=167 , I labeled wave (ii) that wasn't 'technically' the lowest point, the small wave 'ii' next to it was actually 0.5 points lower - but I gave it the benefit of the doubt. Hence taking the lower point as the start of  wave (iii) instead, means (iii) can be counted as a 3 wave move, thus supporting an ending diagonal.

Also, the XMJ appears to be lining up for a ending diagonal as well (after a very long triple zig-zag correction).

Ultimately, the next few trading days should provide better guidance on the wave count. I don't support too much more downside on the XAO, ideally it should head north and retest the upwards sloping support line after several days.

Two possible bullish scenarios below...


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## OzWaveGuy (29 October 2009)

The XAO has continued to head south, which in my last post wasn’t a particularly a positive outcome for the short term wave count. A bearish count is provided below, and some further confirmation is required as discussed below.

The wave count shown below revises the previous count and removes the triangle for wave ‘b’ circle and wave (i) can be counted with a valid 5 wave count from the end of wave ‘b’ circle. Under this count, the larger rally from the March 09 low is considered complete.

From this Top, waves (i) and (ii) are complete, with wave (iii) underway. A short term confirmation will come once waves (i)-(v) down are complete.

For the longer term, the larger wave 'B' circle may still be only one leg in a multi-leg correction.

The resource sector may become divergent (as it did at the all time high) and move to a new short term high over the coming weeks, as the wave count on the XMJ doesn't look complete.


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## Boggo (30 October 2009)

Chart below is the ASX 200 (XJO).
An example of my doodling after a couple of reds.

I think that the Wave 4 could drag on for a while, potential for it to track down to near 4400 when it completes the ABC eventually.

Just my 

(click to expand)


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## OzWaveGuy (2 November 2009)

An update to the bearish count posted here.

Five waves down does not appear quite complete to support a top being in place ( or at least the end of one leg of the corrective rally). However, on the hourly chart the MACD price oscillator (not shown) is oversold and divergent, thus implying the end of wave (iii) was reached last Thursday. 

Wave (iv) may still not be complete, but there is compelling evidence (eg wave alternation of time, and shape between waves (ii) and (iv) ) that wave (v) down is underway to around the 4500 level before a corrective bounce occurs.


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## BNECBD_DayTrader (2 November 2009)

FYI: We hit 4474 at the very end of last month...


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## OzWaveGuy (5 November 2009)

A small, but significant update from the last post

Five waves down looks complete or very close to completion and is very close to the 4500 level discussed previously (hitting 4515 today).

After 5 waves down, a corrective bounce should occur and take the index up into the vicinity of the previous wave (iv) before heading back down. On the TA front, a H&S pattern may play out which would also provide some interesting action.


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## sails (5 November 2009)

Hi OzWaveGuy - you mention on the chart that, because we've just had five waves down, that means more down is likely after a move back up to wave 4.  

However, we've just had five waves up (labelled on your chart from circled b-c) - so how does that work?  Does that usually mean more upside to come - or is that now negated now with five down as well as exceeding wave 4 of the last upmove?

Thanks in advance...


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## OzWaveGuy (5 November 2009)

sails said:


> Hi OzWaveGuy - you mention on the chart that, because we've just had five waves down, that means more down is likely after a move back up to wave 4.
> 
> However, we've just had five waves up (labelled on your chart from circled b-c) - so how does that work?  Does that usually mean more upside to come - or is that now negated now with five down as well as exceeding wave 4 of the last upmove?
> 
> Thanks in advance...




Very valid question Sails. Some info: 

Summary of bear market rally posted in early Sept https://www.aussiestockforums.com/for...postcount=7480

Essentially the 'B' circle wave has moved up in 3 waves - a double zig-zag, which is corrective.

A more recent assessment of the bigger picture with some anticipated targets based on a "simple" zig-zag correction is below. Zig-Zags will try for wave equality, hence a downside target of around 1100 on the XAO is based on the completed 'A' and 'B' circle waves as labeled.


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## prawn_86 (5 November 2009)

OWG,

Do you honestly beleive we will see the XAO at 300? Or is it merely a chat perspective. If that were to happen the World as we know it would have to have changed dramatically for the worse.


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## chatty (5 November 2009)

I can't imagine XAO going down to 300. It means the inflationary scenario will never incur.

XAO down to 300 means the we are heading toward deflationary pressure. Prices of all asset classes will have to go down.

With printed money flying around the globe, and Australia interest rate is relatively high compares to the rest o the world, I can't see it's happening.

I am not an expert in Elliot Wave, but is there other approach to count this wave? To me XAO 2000+ is the most pessimistic I can imagine (btw, this is purely a guess)


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## sails (5 November 2009)

OzWaveGuy said:


> Very valid question Sails. Some info:
> 
> Summary of bear market rally posted in early Sept https://www.aussiestockforums.com/for...postcount=7480
> 
> ...




Thanks OWG.  Firstly, I clicked on your link, but it only takes me to ASF home page.  If the relevant post is in this thead, do you know the post number?

When asking about the 5 waves, I was meaning the 5 in the second half of your zig zag shown in your previous post today.  That's what I wondered if that indicated more upside.  

Secondly, the zig zag seems very elongated.  I thought zig zags were normally more of a contracted arrangement.  The second leg of your zig zag is actually longer than the first - so in my understanding, that's an expanding situation.  I've always thought that expanding ranges tend to continue in the same direction.

Not knocking your views - just that I obviously don't understand EW theory here and genuinely would like to know how you see expanding ranges fitting into an elongated EW zig zag.  In addition there were 5 waves into that last expanded leg and that is what I was questioning about more upside with EW theory in my initial post.

Is it possible that there is an alternate count where the first correction is potentially a w1 & w2 and this is currently a w4?

Thanks again.. 




prawn_86 said:


> OWG,
> 
> Do you honestly beleive we will see the XAO at 300? Or is it merely a chat perspective. If that were to happen the World as we know it would have to have changed dramatically for the worse.




Hi Prawn,

Hopefully my question to OWG won't send this thread into another slamming match.  I understand what OWG has done with his projections on price which is simply taking Fibonacci relationships of previous ranges - which is obviously based on his understanding of EW theory.  It's not gospel - just one of many trading methods.  I don't see any guarantee of price reaching the C targets for that matter - maybe so, maybe not.  Firstly, this B range still has to be proven by the market, then potential targets can be calculated.

If we were really going to get a repeat of the major range down from 2007 to March 2009, I would have thought it would more likely happen from a higher point than where we are now.  But then I'm no expert on direction - that's why I'm asking questions and why I like bi-directional option strategies!

Cheers


----------



## OzWaveGuy (5 November 2009)

My bad - https://www.aussiestockforums.com/forums/showpost.php?p=484791&postcount=7480

In brief: The last 5 waves up of 'B' circle is the end of a 3 wave correction - shown on page 2.

Longer term, we've all heard the term "trend following", so looking at the chart on page 3 - it's exactly that - trend following. But not on a scale that most are familiar with. The 87' lows are of high interest, it's close to the trend line in addition to being a previous wave 4. Will it go lower, maybe, maybe not, ask me when 1500 comes into view (if it ever get's that low).


----------



## zzaaxxss3401 (6 November 2009)

The All Ordinaries is meant to be made up of the top 500 companies in Australia (there only seems to be 497 as the current constituent list). How many companies were listed on the ASX between 1875 and 1950, and how is the weighting for the index created?

If the first 100 years are still building up to eventually have 500 stocks to choose from, then the trend line would be a constant up until that point. Wouldn't it have a steeper slope between (say) 1975 and 2009?

I couldn't find a historical constituent list for the All Ordinaries, dating back to 1875, so I'm simply trying to stir up someone's brain juices out there (and in the mean time trying to find a more optimistic target than 300 ).

A great amount of effort and analysis has been done on the XAO graph - it's all very interesting reading / visualising. Thank you.


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## skc (6 November 2009)

zzaaxxss3401 said:


> The All Ordinaries is meant to be made up of the top 500 companies in Australia (there only seems to be 497 as the current constituent list). How many companies were listed on the ASX between 1875 and 1950, and how is the weighting for the index created?
> 
> If the first 100 years are still building up to eventually have 500 stocks to choose from, then the trend line would be a constant up until that point. Wouldn't it have a steeper slope between (say) 1975 and 2009?
> 
> ...




Showing a long term index chart, pointing to it and say "See, market always goes up" is one of the greatest myth / scams of all time imo. As you pointed out, the constituents of the index changes by way of "Darwinistic" way that will always lead to the index going up in the long term.

It will be simpler to find the DOW components going back 100 years. Work out what your return would be had you held those shares back in 1909 until now.


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## Sean K (6 November 2009)

skc said:


> Showing a long term index chart, pointing to it and say "See, market always goes up" is one of the greatest myth / scams of all time imo.



Unless you buy a representation of the index perhaps.


----------



## sails (6 November 2009)

OzWaveGuy said:


> My bad - https://www.aussiestockforums.com/forums/showpost.php?p=484791&postcount=7480
> 
> In brief: The last 5 waves up of 'B' circle is the end of a 3 wave correction - shown on page 2...




Thanks for the updated link, OWG.
It will be interesting to see how it all pans out.


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## OzWaveGuy (14 November 2009)

Updating the last short term update here

*XAO*
So far the wave count for the XAO is holding solid with waves '1' and '2' complete. Wave '3' down is now assumed to be underway and should be aggressive as almost all wave 3's are. If this aggression to the downside does not appear then I will be on the look-out of alternative short term wave counts that may indicate that wave '2' is still unfolding sideways.


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## Joules MM1 (17 November 2009)

http://club.ino.com/trading/2009/11/the-end-of-a-six-thousand-year-elliott-wave-cycle/

this was sent to me today...... it's a biggie


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## nomore4s (17 November 2009)

Joules MM1 said:


> http://club.ino.com/trading/2009/11/the-end-of-a-six-thousand-year-elliott-wave-cycle/
> 
> this was sent to me today...... it's a biggie




This sort of rubbish is exactly why EW loses creditability with me. Couldn't be bothered reading it all but to try use the great flood and the fall of the roman empire to point to the next down leg is a pretty long bow to draw.

Trading is about probabilities and some of the EW stuff you see posted around loses touch with reality which of course means the probability of things playing out is low.

Some people obviously have way too much time on their hands.


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## Joules MM1 (17 November 2009)

nomore4s said:


> This sort of rubbish is exactly why EW loses creditability with me. Couldn't be bothered reading it all but to try use the great flood and the fall of the roman empire to point to the next down leg is a pretty long bow to draw.
> 
> Trading is about probabilities and some of the EW stuff you see posted around loses touch with reality which of course means the probability of things playing out is low.
> 
> Some people obviously have way too much time on their hands.




yes, agree, common sense _isnt_ that common and neither are good elliotticians


----------



## Porper (17 November 2009)

Joules MM1 said:


> yes, agree, common sense _isnt_ that common and neither are good elliotticians




There are plenty of good Elliott analysts around the trouble is they usually turn out to be a bit whacky.

Prechter comes over as very grounded and  has done an exceptional amount of work bringing R.N Elliotts work back to life.

He has been calling a severe market collapse for the past 10 yrs or so and had to be right eventually.

He is presently calling for another catastrophic decline any day now ... worse than the crash from October 2007. His target is 700 (seven hundred) for the DOW. I think the market will have imploded long before those levels are reached. He is calling for Americans to bail out of all US. banks and move to safe haven countries like Switzerland & New Zealand ( glad I live in the latter )


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## Joules MM1 (17 November 2009)

actually, i rate Peter Kendell and Jeffrey Kennedy as pro traders  who are extremely profficient elliotticians........

try not to watch too many of Robert jnrs videos .....they put you into perma sell mode......


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## motorway (17 November 2009)

Any LONG TERM analysis  on Indexes is Suspect because of 

"Permanence breakdown"  

The stocks themselves change character
But the make up of indexes completely change character ALL TOGETHER

whether Empires come or go implode or Explode

Stock indexes in the long run will only GO UP

That is how they are designed
and Some like the DOW Actively managed.. 

Indexes end up with the stocks that will go up / are going up.

Even the ASX  switches from being Financial heavy to resource heavy
The index is never a constant ..

If the only thing to make money was to be undertakers
The Index would become undertaker heavy

HENCE EW is ridiculous when applied through the ages on Indexes
The Thing that was 12345 is gone by the time of ABC 

Motorway


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## nunthewiser (17 November 2009)

motorway said:


> Stock indexes in the long run will only GO UP
> 
> That is how they are designed





Not all .

Sorry for being pedantic but indexes will only always go up until such time as they do not.


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## Whiskers (17 November 2009)

motorway said:


> Any LONG TERM analysis  on Indexes is Suspect because of
> 
> "Permanence breakdown"
> 
> ...




Well done Motorway, in rather blunt terms as opposed to your usual tad 'mystical' manner. 




nunthewiser said:


> Not all .
> 
> Sorry for being pedantic but indexes will only always go up until such time as they do not.




Hey, Nun... you aught to be sorry :... heck, what's 20 odd years in whatever that scenario was!


----------



## motorway (17 November 2009)

nunthewiser said:


> Not all .
> 
> Sorry for being pedantic but indexes will only always go up until such time as they do not.




They need more undertakers ,  maybe 

or was it prostitutes and Beer  

You can bet that they will get it right and it will GO UP..



> heck, what's 20 odd years in whatever that scenario was!




Exactly, Whiskers  



Motorway


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## nunthewiser (17 November 2009)

It was the Nikkei 225..........


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## motorway (17 November 2009)

nunthewiser said:


> It was the Nikkei 225..........




ahhhh  should have looked a bit closer ...

I guess The Bigger the bubble The Bigger the headache 

The NASDAQ a good example too

But the point remains Indexes are insubstantial over long time spans..

the players  are always changing
Even if the Game doesn't 


Motorway


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## White_Knight (18 November 2009)

nomore4s said:


> This sort of rubbish is exactly why EW loses creditability with me. Couldn't be bothered reading it all but to try use the great flood and the fall of the roman empire to point to the next down leg is a pretty long bow to draw.
> 
> Trading is about probabilities and some of the EW stuff you see posted around loses touch with reality which of course means the probability of things playing out is low.
> 
> Some people obviously have way too much time on their hands.




Haha...i agree EW is generally crap, but that article was clearly a pisstake.


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## Porper (18 November 2009)

White_Knight said:


> Haha...i agree EW is generally crap




Would you like to explain why you think Elliott is crap ?

If you have studied it and know all of its rules and guidelines,  have also traded it as part of your methodology and found it to be of no use then you have every right to make that statement.

Unfotunately like many sceptics on here I doubt that will be the case. Apologies if you have.


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## Timmy (18 November 2009)

Porper said:


> Would you like to explain why you think Elliott is crap ?




There is a thread available for debate on EW, and it is best to direct the debate over there if needed. The Elliott Wave debate

This thread here was started so that EWers could talk about the XAO without the distractions on the merits or otherwise of EW.


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## Porper (18 November 2009)

Timmy said:


> There is a thread available for debate on EW, and it is best to direct the debate over there if needed. The Elliott Wave debate
> 
> This thread here was started so that EWers could talk about the XAO without the distractions on the merits or otherwise of EW.




Sorry my mistake got the wrong thread somehow. 

Maybe a mod can transfer it across.


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## OzWaveGuy (24 November 2009)

Not sure what the last dozen or so posts have to do with the EW and the XAO....but lets see if that can be changed whilst people look for the correct threads to debate in.

From the last post the very short term still had further to go to complete wave 2 (and was swiftly dealt with when wave 2 glanced above 76.8% retrace at 4808)

The wave shapes in the last 5 days or so are not ideal and lends itself to further interpretation - mainly because wave 'ii' up is considered an expanded flat (3-3-5). However, it's quite possible the sell off today is the start of a series of wave 3's or further sub-divisions down.

As mentioned in the previous post, some solid force downwards would help validate the start of wave 3's. 

*An additional point to mention:* Each wave has certain characteristics that can help validate or invalidate a position. In this case, looking at the time the market took to retrace wave (c) of 2 isn't necessarily a supportive sign for the wave count as labeled. In many cases (not all), if wave c's are retraced in less time they take to form, then this can be a useful indicator to suggest the correction is complete. Hence in this case, further time is required to validate the current wave count.


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## nunthewiser (24 November 2009)

Thanks Oz wave 

Any other EW users would like to give some analysis other than " it may go up and it may go down " ? Will the analysis still be valid if it goes sideways also?


----------



## sinner (24 November 2009)

nunthewiser said:


> Thanks Oz wave
> 
> Any other EW users would like to give some analysis other than " it may go up and it may go down " ? Will the analysis still be valid if it goes sideways also?




My rudimentary count is wave 5 impulsive is over, followed by wave A down wave B up (continue or close to completion) we are waiting final corrective wave C down before next market trend is decided.


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## OzWaveGuy (1 December 2009)

In the last post here the characteristics of waves were briefly discussed, the net result was there was a good chance that corrective wave '2' had still to complete. As of today, this seems to be the case.

A wave '2' flat with an internal 3-3-5 structure now appears to be almost complete. One last push upwards to around the 4817 level would deliver a textbook flat with a 'B' wave failure. Looking at Fibonacci, the 'B' wave is almost spot on 76.8% retrace of 'A'


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## OzWaveGuy (11 December 2009)

Updating the last post here wave '2' is complete as a flat (3-3-5 wave structure).

The aggressive downside thrust that one would expect under the commencement of a wave 3 has still not unfolded. The downside since the completion of wave '2' has been labored,  leading to caution. 

From the end of wave '2', the wave count so far has been unfolding in waves of 5 within a reasonably tight channel, but an aggressive break down thru the 4600 level is really needed. However, a retracement upwards would be ideal soon, breaking out of the channel and heading up to the 4700 level, before resuming the downtrend. 

Also, the upcoming holiday season may certainly be slowing the XAO down.

I have included an insert of the larger daily picture so the larger downside potential can be seen.


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## nulla nulla (11 December 2009)

*Re: XAO Analysis*

I'm curious to know how the Elliot Wavers explain the 4 days of rises on the xao followed by 5 days of falls as at close of business 10/12/2009? I would be interested to hear where they see the market going from here, given the XAO has been in what appears to be a down trending channel since late September early October 2009, while the dow has broken through 10,000 and is now challenging 10,500 during the same peiod of time?


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## Whiskers (11 December 2009)

I have an interest in cycles generally, although I think EW is probably more to do with pattern analysis than true cycles. 

Anyway, based on my secret cycle analysis,  translated into EW terms, here's one for a suggestion... on the weekly XAO chart, if the July low is bottom... looking for the break up. It looks good to me. 

I'd be interested in any good arguement for or against.


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## OzWaveGuy (11 December 2009)

Whiskers said:


> I have an interest in cycles generally, although I think EW is probably more to do with pattern analysis than true cycles.
> 
> Anyway, based on my secret cycle analysis,  translated into EW terms, here's one for a suggestion... on the weekly XAO chart, if the July low is bottom... looking for the break up. It looks good to me.
> 
> I'd be interested in any good arguement for or against.




Whiskers, any reason your using a weekly chart for your analysis over such a short time frame? A lot of the 'detail' is lost, thus reducing accuracy of your primary and secondary counts. 

From what you have presented, it's hard to provide any significant input


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## Whiskers (11 December 2009)

Hi OzWaveGuy, basically I'm a fundamental, cyclist (sic?) ... but keep an eye on the weekly chart for a feel for the bigger picture trend... especially when the daily news and charts are a bit wishy washy and choppy. 

To that extent I think I'm trying to do the same as Elliott when he first developed his EW system. I believe I read somewhere that he essentially got his general trend (direction) from fundamental analysis and noticed the patterns that we know as EW as a means of measuring the likely run of each leg and when a reversal of the cycle is likely.

Now you are clearly more versed in the finite workings of the detail than me and that is handy information to learn especially for the short term movements... but essentially I'm just not convinced of the big picture EW count that suggests that we are still in a down trend.

Having said that, I initially didn't expect the correction to go as low as it did, but I think there was a fundamental reason for that, not so much the Financial Crisis per se, but that the Bush administration had flaged general measures to fix the system, stabalising confidence and the markets a bit but then failed to instigate the right measures (well hardly any measures) quickly enough. The same to be said for why the crisis developed in the first place... hence the extended collapse.

So, essentially what I'm querying is how certain you are of your EW analysis (macro count) that the trend is still down... and is my proposition a viable count in EW terms.

Just to sum up fundamentally, I'm expecting the AUD to fall back... the POG in USD has already corrected back significantially as I expected and should range around the recent lows and highs for some time while the USD appreciates a bit in light of a better outlook in the US economy. The net result would be better AUD export prices for Aus business especially our large resource sector flowing through to a stronger local market. That's essentially the fundamentials that I am currently factoring in to give my EW count some broad (macro count) direction.


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## OzWaveGuy (12 December 2009)

Whiskers said:


> ...So, essentially what I'm querying is how certain you are of your EW analysis (macro count) that the trend is still down... and is my proposition a viable count in EW terms....




Five waves down from the high in 2007 to march 09. This is a significant signal as another 5 waves down needs to occur.

As I mentioned earlier - the timeframe your using is too short for the weekly chart for any input from me, detail is lost and so is the count. Others may be able to provide input on what you have offered.


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## nomore4s (12 December 2009)

Whiskers said:


> I have an interest in cycles generally, although I think EW is probably more to do with pattern analysis than true cycles.
> 
> Anyway, based on my secret cycle analysis,  translated into EW terms, here's one for a suggestion... on the weekly XAO chart, if the July low is bottom... looking for the break up. It looks good to me.
> 
> I'd be interested in any good arguement for or against.




lol, talk about forcing a count. There has been a clear 3 wave move up from the March bottom on the weekly chart and there is now a triangle forming under resistance. If you use a weekly chart the idea is to look at more then 6 months of the chart.



Whiskers said:


> I'm still leaning to a break up, which seems to be supported by my fundamentals and translated into this macro (weekly) EW count.




You've used a  weekly chart to get a "macro" view but then you only use about 6 months of the chart to confirm your bias and fit a count that is at best laughable. You aren't going to get much of a macro view looking at a weekly chart on a 6 month time frame

Edit: The 3 wave move looks like a standard 3 wave corrective move from the bottom after a 5 wave decline and has retraced to nearly spot on 50% of the move down from 2007 but I'm just guessing as I have no real interest in EW.


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## Porper (12 December 2009)

nomore4s said:


> talk about forcing a count.  confirm your bias and fit a count that is at best laughable.



There is no reason to get personal, Whiskers has said that he is no Elliott expert Nomore.




nomore4s said:


> Edit: The 3 wave move looks like a standard 3 wave corrective move from the bottom after a 5 wave decline




The trouble is most three wave moves can look like a  correction. The thing here is whether we will see five waves up to complete only the first leg of the correction higher or whether we break down now and continue the larger degree trend down.

The formation of the triangle would suggest the prior (if it breaks the upper trend line).

One Elliott guideline contradicting this scenario is that if wave 2 is a flat pattern(which it is) then wave 4 should be deep...which it isn't if the triangle triggers.

So the count is by no means clear.

I favour a rally into January then a decent correction.

Trading the triangle as a standalone pattern gives a target of around 5070. A true wave 5 should complete higher.


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## Whiskers (12 December 2009)

nomore4s said:


> lol, talk about forcing a count.



On the contrary... I'm simply playing devils advocate to test different theories.



> There has been a clear 3 wave move up from the March bottom on the weekly chart and there is now a triangle forming under resistance. If you use a weekly chart the idea is to look at more then 6 months of the chart.



Well, I just posted the last six months for clarity of the current move... but I did say assuming that July was the bottom as my fundamental analysis suggests... 



Whiskers said:


> I have an interest in cycles generally, although I think EW is probably more to do with pattern analysis than true cycles.
> 
> Anyway, based on my secret cycle analysis,  translated into EW terms, here's one for a suggestion... on the weekly XAO chart, *if the July low is bottom.*.. looking for the break up. It looks good to me.
> 
> I'd be interested in any good arguement for or against.




...and from my discussion on other threads especially re Uncle Festivus... my big picture forcast was that there would be expediant political measures to relieve the crisis followed by a recovery and the hard reality of fixing the US debt problems would sink in again later. The reason I mention that is because it is consistant with a Flat EW correction something like I have scribbled on your chart.

Is there any Definite EW that rules out a Flat correction like this.

Again, just the devils advocate position in my process of ruling possibilities in or out.


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## nomore4s (12 December 2009)

Porper said:


> There is no reason to get personal, Whiskers has said that he is no Elliott expert Nomore.




I'm sorry if it came across as a personal dig at Whiskers but it is a count that I do find laughable. Whiskers asked for arguments for or against and I gave mine.


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## Porper (12 December 2009)

Whiskers said:


> Is there any Definite EW that rules out a Flat correction like this.




No rule Whiskers but as my post above points out if wave 2 is a flat then the law of alternation states that wave 4 should be a sharp correction (a zigzgag) not a triangle.It isn't always adhered to, and in this case I don't think it will be.


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## OzWaveGuy (12 December 2009)

Just some additional info on alternation:

Alternation between waves can include *one or more *of the following characteristics:

Different Wave Pattern
Different Time To Complete
Different Price action
Different Level of Complexity

Hence, Wave 4 may not necessarily be a Sharp Correction if wave 2 is a flat. It may in fact have other characteristics mentioned above, but in *most* cases won't be the exact pattern of Wave 2.

Often I see wave 2's correct more than 38%, where wave 4's will regularly correct to 38% - Hence, Different Price Action is present.

Triangles can be very tough to get right early in the development process. Hence looking at the internals of each wave within the triangle is key - using a weekly chart as submitted above is not an optimum choice in understanding the internal facts that are embedded in the charts. *It is these very facts *we need to understand to construct a count.


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## Whiskers (12 December 2009)

Whiskers said:


> The reason I mention that is because it is consistant with a Flat EW correction something like I have scribbled on your chart.




Oops... forgot to attach the chart above... showing roughly what I'm thinking is most likely.

The problem I have with the count as ozwaveguy and others are working with, is that if we have just started wave C down I'm finding it difficult  from a fundamental basis to imagine wave C equalling wave A.  I can imagine going lower than present sometime later to near the last low. But surely the damage going down near 1000 would be exponentially considerably worse than wave A. That would virtually be armageddon.

As I mentioned earlier, I believe Elliott based his analysis in fundamentals and I'm having some trouble trying to marry up some fundamentals for the worst case EW scenerio.


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## Porper (12 December 2009)

Whiskers said:


> Oops...  I believe Elliott based his analysis in fundamentals and I'm having some trouble trying to marry up some fundamentals for the worst case EW scenerio.




Where did you read this Whiskers ?

As far as I know the whole idea of the wave principle is to not rely on fundamentals.This is more for the Elliotticians, most of us tend to be realists.

An example is Prechter suggesting the DOW will travel to 400. It can't happen i.m.o. That's not to say we can't breach the March lows by a substantial amount.

There are also various interpretations of the Wave theory.

Neely has his own band of followers, as does Prechter.

Some of us put emphasis on certain aspects despite the "purists" correcting our counts etc.


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## Whiskers (12 December 2009)

Porper said:


> Where did you read this Whiskers ?




I was reading something about Elliotts history and where it mentioned Elliott winning a stock trading competition using EW but mentioned him using basic FA to help/guide his analysis.

I did have the link bookmarked, but my PC hard drive has crashed since and I hadn't saved my bookmarks... but I'll see if I can find it again.


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## Porper (12 December 2009)

Whiskers said:


> I was reading something about Elliotts history and where it mentioned Elliott winning a stock trading competition using EW but mentioned him using basic FA to help/guide his analysis.
> 
> I did have the link bookmarked, but my PC hard drive has crashed since and I hadn't saved my bookmarks... but I'll see if I can find it again.




You are not getting mixed up with Prechter winning the trading champs are you ?

If anybody uses fundamentals to "guide" the count you are not using Elliott Wave at all i.m.o. The whole idea is not to let any emotion influence the count, whatever you expect.

Anyway maybe a topic for another thread as this doesn't have anything to do with the XAO.


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## Boggo (12 December 2009)

I haven't read all of this thread but is Robert Miner the guy being referred to ?

_Of the hundreds of technical analysts and trading and investing advisors, Robert Miner was named Market Guru of the Year by the 1997 Supertraders Almanac for his incredible analysis and forecasting of the S&P in 1996. Early in 1996 when the S&P stood at 640 and most analysts and advisors were predicting the "overdue"top was at hand, Miner projected that the S&P would reach a minimum of 720 in 1996 and would not complete the bull trend prior to Oct. These were just the minimum price and time projections for 1996.

Miner recognized the May 23 - Aug. 216 decline as a correction in the bull trend and not the beginning of a bear market as was so loudly proclaimed by many analysts. In the July 20 Dynamic Trader Weekly Report, Miner identified Aug. 216 as a wave four low and projected an immediate continuation of the bull trend to new highs. This is exactly what unfolded. _

His trading course is excellent as is his book "Dynamic Trading" (all 1.73 Kgs of it).
http://www.dynamictraders.com/about/company-info.html


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## Porper (12 December 2009)

Boggo said:


> I haven't read all of this thread but is Robert Miner the guy being referred to ?




Both Prechter & Miner won trading championships.I didn't know that Elliott himself did.

Agree his course & book (Miner) are very good. He keeps Elliott Wave very simple and doesn't entertain "complex" corrections for trading.


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## Whiskers (12 December 2009)

Porper said:


> You are not getting mixed up with Prechter winning the trading champs are you ?




You're probably right there Porper.

Actually with Elliott it wasn't a trading comp per se... he challenged the financial community that he could accurately predict the market and nailed the 1935 low. http://www.elliottwave.com/info/

This isn't the article I was thinking of, but it goes pretty close to actually saying it with "_The former expert organizer of businesses had uncovered, through meticulous study, the organizational principle behind the movement of markets_" _and 

" ... human activities indicates that practically all developments which result from our social-economic processes follow a law that causes them to repeat themselves in similar and constantly recurring serials of waves or impulses of definite number and pattern... The stock market illustrates the wave impulse common to social-economic activity... It has its law, just as is true of other things throughout the universe_." and 

_"One of these was a ground-breaking work that lifted the Wave Principle from a comprehensive catalog of the market's behavioral patterns to a broad theory of collective human behavior that was new to the fields of economics and sociology."_

Although it isn't the article I had in mind, for me it and other articles still says Elliott had a great understanding of the fundamentals of social-economic behavior especially relating to the stock market that he used to frame and refine his wave types and counts... isn't that what is commonly referred to FA. 

Conversely, it seems logical to me that an EW'ist should be able to relate a particular wave count/scenerio back to some social-economic (FA) rationale... a la my attempting to marry up the current and near future anticipated behaviour of the 'economic community' with alternate wave counts.


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## OzWaveGuy (13 December 2009)

Whiskers said:


> Conversely, it seems logical to me that an EW'ist should be able to relate a particular wave count/scenerio back to some social-economic (FA) rationale... a la my attempting to marry up the current and near future anticipated behaviour of the 'economic community' with alternate wave counts.




Wave counts can be related to extremes in optimism and pessimism at the social level. 

The stock market indexes are quite simply a way of measuring these extremes. Question: If there wasn't a stock market, could you still measure these extremes. Answer: Yes. They can be identified and measured - but almost in all cases are more difficult than indexes in the stock market itself.

Second Question: What were the 'fundamentals' at 4pm on 1st Nov 2007? Did you believe they would lead to a ~50% decline on the XAO over the next 352 trading days? Answer: Of course not. (Note: Check the forum to see if anyone did).

The 'Fundamentals' (whichever they may be) are a lagging indicator to human behavior and the corresponding extremes in pessimism and optimism.

One thing is for certain: It is again human behavior that will attempt to correlate fundamentals to the resultant extremes *after the fact* (there is also a multi-billion dollar industry of 'experts' that are good examples of this).


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## Whiskers (14 December 2009)

OzWaveGuy said:


> Wave counts can be related to extremes in optimism and pessimism at the social level.
> 
> The stock market indexes are quite simply a way of measuring these extremes. Question: If there wasn't a stock market, could you still measure these extremes. Answer: Yes. They can be identified and measured - but almost in all cases are more difficult than indexes in the stock market itself.




Agree here



> Second Question: What were the 'fundamentals' at 4pm on 1st Nov 2007? *Did you believe they would lead to a ~50% decline on the XAO over the next 352 trading days?* Answer: Of course not. (Note: Check the forum to see if anyone did).




Well, I think there was a couple of tad excentric or perfectionist economist posters that came close. :

But no, the fundamentals at 4.00pm on the first of Nov 2007 only only related to investor psychology and decisions at the opening of the next business day and similarly the day after that and so on.

I'm aware that some analysis including EW was making such prediction... which no doubt added to the later pessimism becoming a self-fulfilling profecy, when Bush failed to deliver on his flagged remedies and caused the further sharp falls including the Aus bouse... which it is now evident didn't fall into such a recessionary hole as the rest of the world, was overdone, but for me is depressed because of among other things, arguably a degree of fundamental (discretionary) manipulation/mismanagement of the US economy and USD. A notable difference being the ousting of Bush for the Obama administration which I think people are just about ready to turn USD's back into the US from relative safe havens like Aus which would lower the AUDUSD and boost Aus export earnings and the XAO, giving the XAO a decent lift.



> The 'Fundamentals' (whichever they may be) are a lagging indicator to human behavior and the corresponding extremes in pessimism and optimism.




I'm not sure what you mean here. Known 'fundamentals' are surely a lead indicator of human behaviour. If you mean not yet known, ie future released 'fundamentals' that relate to past and or present time periods, then it can't be an indicator of human behaviour, lagging or otherwise if it's not yet known to anyone. But, some people at least make an educated guess of what those figures, circumstances etc might be. 

Bearing in mind that Elliott was also an accountant and sophisticated financial manager, that surely was an influential element in his forcasting, including the bottom of the Dow.



> One thing is for certain: It is again human behavior that will attempt to correlate fundamentals to the resultant extremes *after the fact* (there is also a multi-billion dollar industry of 'experts' that are good examples of this).




Well, yes that's true too, some FA, TA and EW alike, after the fact tends to fuel excess optimism and pessimism and correlated exaggerated extremes in the markets. And conversely, there's a lot of 'industry' in forcasting... where such forcasting analysis tends to become self-fulfilling profecy.

Which brings me back to my original point about Elliott... he was a brilliant organiser and exponent of social-economic behaviour. It was his FA ability of the psychology (which includes logical, mathematical, and financial attributes) of people that was instrumental in correlating the link beween the behaviour of people and the market that defined his system. 

For me it seems that some prominant EW 'experts' in their 'industry' best interests do not make enough of that connection, but tend to promote their 'wisdom' of EW like guru status in the furtherance of promoting their financial products... which I have to admit made it difficult for me to follow and make sense of EW as purely a stastical model. 

Also, for me it's most important to remember that he formulated his system in an American culture, hence is it not reasonable to bear in mind that different cultures and individual people (especially since the advent of huge funds controlled by relatively few people) have different sensitivies, values and risk appetite thresholds etc and they often change over time.

Therefore to ignore the social context of the environment where Elliott developed his system and to presume that peoples knowledge, values etc don't change and fail to integrate that into ones EW analysis, for me is folley.

Other cycle analysis and Human Resource Management for that matter, make allowance for choices that people make at certain junctures to further define future possibilities.

That's basically my rationale for the Flat correction scenerio, based on current evidence... which btw factors in a degree of 'industry' self-fulfulling profecy as part of the psychology of the market.


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## Sean K (14 December 2009)

OzWaveGuy said:


> Second Question: What were the 'fundamentals' at 4pm on 1st Nov 2007? Did you believe they would lead to a ~50% decline on the XAO over the next 352 trading days? Answer: Of course not. (Note: Check the forum to see if anyone did).



I think you should check. And then check your own EW calls for a comparison.


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## jancha (14 December 2009)

kennas said:


> I think you should check. And then check your own EW calls for a comparison.




Hey Kennas what happened to that break you were taking?


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## OzWaveGuy (15 December 2009)

A very brief update from the last XAO post here.

The 4700 level was reached under the corrective power of a three wave move, so now looking for validation that the XAO is readying for a push lower (primary view) or a continuance of further corrective action - sideways or possibly higher (secondary view).


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## ASXNoob (15 December 2009)

OzWaveGuy said:


> XAO is readying for a push lower (primary view) or a continuance of further corrective action - sideways or possibly higher (secondary view).




Ive been following this thread a bit and dont want to rude but thats basically saying the market could go down or sideways or up?


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## Wysiwyg (15 December 2009)

ASXNoob said:


> Ive been following this thread a bit and dont want to rude but thats basically saying the market could go down or sideways or up?



Noob, part of making market predictions is being wrong. Part of making market profits is being right.


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## Timmy (16 December 2009)

ASXNoob said:


> Ive been following this thread a bit and dont want to rude but thats basically saying the market could go down or sideways or up?




That's what I thought it said too.


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## nunthewiser (16 December 2009)

ASXNoob said:


> Ive been following this thread a bit and dont want to rude but thats basically saying the market could go down or sideways or up?





 Welcome to the world of EW ............This way it can be shown to be a viable analysis.


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## Porper (16 December 2009)

nunthewiser said:


> Welcome to the world of EW ............This way it can be shown to be a viable analysis.




The trouble is, I can count on one hand the amount of people on this forum that actually understand it.

People shouldn't knock any method unless they have studied it and can prove that it doesn't work.

Beginners will chop and change between strategies for this very reason.

Clue: It is all about probabilities and not being correct in your analysis all of the time.


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## Awesomandy (16 December 2009)

ASXNoob said:


> Ive been following this thread a bit and dont want to rude but thats basically saying the market could go down or sideways or up?




I think the quote has been taken out of context, as it also states that we are "now looking for validation". We are currently at a level which has been identified as a potential turning point and waiting for further signals to validate the trend (and waves). Only after this is done, when further predictions can be made.


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## Wysiwyg (16 December 2009)

OzWaveGuy said:


> *XAO - Expanding Triangle Scenario for Wave (4)*
> 
> *There is building evidence that the XAO could break down from the current levels by the fact that a series of 2nd waves could be considered complete. So far, the downwards moves have been unfolding in 5 waves - indicating further downside is required.*
> 
> A break below the end of wave 'i' would suggestive of the next smaller legs down commencing. Alternatively further corrective moves slightly higher could still unfold before the downside resumes.






OzWaveGuy said:


> *XAO - Expanding Triangle, Wave D*
> 
> *The update from today's action is fairly straightforward - from a short term standpoint, there is solid probability for further upside tomorrow to complete 5 small waves up - which would complete a Flat correction for wav**e (ii)*



These two posts were consecutive days. That is the top post was followed by the second post. Now the analysis was "biased" to a further correction to the downside form the very beginning of the thread. It never happened and we all get it wrong.  It just proves that technical analysis is a bias game. 

The top post (here) is still biased toward that "D" and it just wouldn't play out. Then a semblance of what was actually happening in the next day post as the market turns up again.


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## OzWaveGuy (17 January 2010)

From previous discussions on the XAO wave counts here validation of the current count came with an expectation of a solid break downwards under 4600. Instead, the XAO broke out of a triangle (which I'll cover in a bit more detail in a future post) on Dec 22nd and headed to new medium term highs.

This triangle formation is an ending pattern and appears as wave 4's or as B and X-Waves in complex corrections - either way, it's an ominous sign. The break to new highs indicates another a-b-c correction is underway, and will ultimately form the third zig-zag in a triple zig-zag correction for wave 'B' circle.

There is a remote chance that this final corrective zig-zag has already completed, and is very small compared to the first two zig-zags. Strong evidence of a breakout of the channel would be needed to justify this position. 

So far, this 'B' circle wave is operating within a tight upwards sloping channel. A potential false break out (shown) would not be a surprise for the finishing touches.

5235 is a point of interest due to a Fibonacci relationship with prior a wave and an area of solid resistance.


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## Sean K (17 January 2010)

OzWaveGuy said:


> So far, this 'B' circle wave is operating within a tight upwards sloping channel. A potential false break out (shown) would not be a surprise for the finishing touches.
> 
> 5235 is a point of interest due to a Fibonacci relationship with prior a wave and an area of solid resistance.



OWG, If we ever get to the top of this B in a circle wave and head for the C in a circle where is that supposed to end according to EW? Cheers.


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## condog (17 January 2010)

OWG this input is exceptional, keep it up.....

My father tracks this closely as well and I have passed this post on to him....as he has significant more understanding of Elliot Waves then I ......

I will get back to you with his comments.....

Love it..... keep it up...


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## brty (17 January 2010)

How about a simpler Elliott count like this one....




brty


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## lioness (17 January 2010)

kennas said:


> OWG, If we ever get to the top of this B in a circle wave and head for the C in a circle where is that supposed to end according to EW? Cheers.




Kennas: Answer = 1500 on the All Ords.


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## Whiskers (27 January 2010)

OWG, how's your wave counting going?

I think my earlier count is still valid, but it's stretching it a bit... curious to see any alternate counts.


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## OzWaveGuy (29 January 2010)

Some interesting action with the AllOrds just under 4600....from the last post:

"There is a remote chance that this final corrective zig-zag has already completed, and is very small compared to the first two zig-zags. Strong evidence of a breakout of the channel would be needed to justify this position."​
The evidence is supportive of the above view, since the end of the recent triangle has been broken also. More later.


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## OzWaveGuy (30 January 2010)

OzWaveGuy said:


> Some interesting action with the AllOrds just under 4600....from the last post:
> 
> "There is a remote chance that this final corrective zig-zag has already completed, and is very small compared to the first two zig-zags. Strong evidence of a breakout of the channel would be needed to justify this position."​
> The evidence is supportive of the above view, since the end of the recent triangle has been broken also. More later.




A visual to the above post....


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## Sean K (30 January 2010)

OzWaveGuy said:


> A visual to the above post....



OWG, does putting your charts on a semi-log scale alter your counts and support levels in anyway, or does short to long term EW work happily with non log charts?


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## condog (2 February 2010)

Love your work OWG

Showed it to the old man...he loved it...it confirms his is spot on....so big ta ...

Keep it up mate...this is so useful to have in here...


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## OzWaveGuy (3 February 2010)

condog said:


> Love your work OWG
> 
> Showed it to the old man...he loved it...it confirms his is spot on....so big ta ...
> 
> Keep it up mate...this is so useful to have in here...




Thanks Condog. 

In answer to your question - "Decline" is correct. The short term outlook is for wave '2' (upwards) to form before another leg down commences - as per last chart. Time is still required for confirmation of the short term wave counts, ideally wave '2' to retrace around 50% and then a return of the downtrend, passing thru the recent lows.


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## OzWaveGuy (8 February 2010)

Elliott Wave XAO update to the last chart here

The short term XAO action has provided some additional information to consider...namely that 5 waves down is complete or very near completion.

The MACD price oscillator implies that a series of wave 3's down have pushed the oscillator to extremes on the 60min chart. The last wave (v) down has been met with divergence, implying a correction is now at hand.

A break upwards out of a near 'perfect' channel would provide additional confirmation of corrective action (provided it occurs in waves of 3 of course). 

Additional Considerations: Since there are 4 touch points of the channel, which can be considered a little too perfect, there is risk that this wave structure isn't complete (eg further sub-division downwards could unfold).


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## Whiskers (8 February 2010)

OzWaveGuy said:


> The short term XAO action has provided some additional information to consider...namely that *5 waves down is complete or very near completion*. The MACD price oscillator implies that a series of wave 3's down have pushed the oscillator to extremes on the 60min chart. The last wave (v) down has been met with divergence, implying a correction is now at hand.
> 
> A break upwards out of a near 'perfect' channel would provide additional confirmation of corrective action (provided it occurs in waves of 3 of course).




I agree with your short term count... but as previously mentioned, I favor that the XAO has bottomed and is in an uptrend and my fovored count is we have a '1' upwards and this wave 'iv' down makes a minor 'a' of a correction over the next few weeks before pushing onwards and upwards again. 

In the short term we can't go wrong since we both agree , so we'll have to wait and see how my wave 'c' or your '3' down goes.

PS: OWG, Can you eloberate on your first abc in post #246. That's the main bit I'm having trouble interpreting.


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## OzWaveGuy (10 February 2010)

Whiskers said:


> PS: OWG, Can you eloberate on your first abc in post #246. That's the main bit I'm having trouble interpreting.




Whiskers - In what way? It looks like a 3 wave move to me. The first wave 'b' circle is then broken by the following 'X' wave.  Hence, I favored interpreting the XAO move from the March 09 low as corrective because of the presence of 3 waves v's 5.


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## Whiskers (11 February 2010)

OzWaveGuy said:


> Whiskers - In what way? It looks like a 3 wave move to me. The first wave 'b' circle is then broken by the following 'X' wave.  Hence, I favored interpreting the XAO move from the March 09 low as corrective because of the presence of 3 waves v's 5.




Yeah I understand you rational there OWG, but I'm curious about the wave type particularly for the wave 'b' part.


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## OzWaveGuy (12 February 2010)

*XAO - Wave 'C' circle underway*

Discussed in the last post was a strong view that a correction was at hand. This correction is underway, and has resisted a confident break thru the 23.2% Fib retrace of the initial 5 waves down.

Whilst it is difficult to estimate corrective behaviors (as there are many types of corrections including the complex types that are doubles and triples), a 23.2% retrace would be a minimum retrace and a 50%-61.8% would be considered 'optimum' for wave 2's. Still too early to tell on the wave shape of this correction, but the wave structure is unfolding in 3's (perhaps a flat correction).

4700-4750 is an area of strong resistance as well as containing a number of previous wave 4's (of different degrees) from the recent leg down and is a strong point of interest for a turn. 

Discussed in several posts previously, it should be noted that I'm assuming wave 'C' circle down is underway, but there is still a possibility that Wave 'B' circle is still underway and the leg up from March 09 is all but 1 leg of a much larger 3 leg correction that will last for several years. In any event, the medium term should be down.


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## OzWaveGuy (12 February 2010)

Whiskers said:


> Yeah I understand you rational there OWG, but I'm curious about the wave type particularly for the wave 'b' part.




A triangle.


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## OzWaveGuy (19 February 2010)

*XAO - Corrective wave '2' complete or near completion*

In the last post here, an upwards correction was discussed with a possible turn in the 4700-4750 range - this would suggest wave '2' up was complete (or one complex leg of it).

As of today, 4700 hasn't been broken and the All Ords is oscillating around the 38.2% retrace level (@4675). Wave '2' has so far been correcting in waves of 3, and it appears that another leg up will be needed for completion. I've simplified the correction to a 3 wave a-b-c, but in reality the correction is more complex with two sets of a double zig-zag (for those who want to understand the finer details).

A push up to 4735 will hit a 50% retrace, and this level also represents fib relationships with previous waves in the current correction as well.

Breaking down out of the corrective channel with a small 5 waves would strongly suggest that the wave 2 correction has completed. The MACD price oscillator (not shown) is also indicating that an extreme may have been reached and could well become divergent should the index continue to climb to the levels discussed above. The next several trading days should provide better insight on the ending formation of wave 2


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## tywo (22 February 2010)

I believe monday morning has given us a vital clue as to how wave 2 will play out. it looks as if the rise from 4465 is of a complex structure (double zigzag) and the market might continue to rally higher till the end of this week. i believe wave 3 down could start as early as this friday or possibly monday of next week.


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## OzWaveGuy (24 February 2010)

*An inelegant start to Five Waves down?*

In the previous post here, a turn for the XAO was discussed at the 4735 area, this has occurred as well as a break of the corrective channel that helps to validate an end to wave ‘2’ up. This validation also requires Fives waves to support further declines, hence, the question now is – Has today's decline occurred in five waves or three?

The initial decline from 4732 doesn’t look like 5 waves at first look. However, if one was to omit the 6 point ‘spike’ after the Tuesday close (as shown in the detail), then a series of five waves can be counted – wave ‘ii’ a flat (3-3-5) and wave ‘iv’ a triangle. Under this count, tomorrow should see a correction back up to retest the lower channel line in the 4696 area before the downtrend resumes.

If today's decline is in three waves, then further corrective moves will unfold and may indicate wave '2' is still underway.


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## OzWaveGuy (24 February 2010)

tywo said:


> I believe monday morning has given us a vital clue as to how wave 2 will play out. it looks as if the rise from 4465 is of a complex structure (double zigzag) and the market might continue to rally higher till the end of this week. i believe wave 3 down could start as early as this friday or possibly monday of next week.




I thought so too - now I'm not so convinced based on todays action


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## tywo (25 February 2010)

with today's sell off it seems like wave 2 is over and that we are in the early stages of wave 3. the wave structure for wave 2 better reads as a single zigzag with a subdivided "c" wave.

charts are posted on my blog


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## Boggo (25 February 2010)

tywo said:


> with today's sell off it seems like wave 2 is over and that we are in the early stages of wave 3.




So we could then be looking at sub 4000 for W.3 ??


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## tywo (25 February 2010)

hi boggo,

i believe so... should the count change i will be sure to comment... but for now the 3800 area looks likely.


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## OzWaveGuy (4 March 2010)

In the last post here from the 24th, the assumption was for a decline to occur in 5 waves - which we saw, but the larger degree pattern ended up being a zig-zag correction (5-3-5).  Once the XAO broke out from the downward channel and also retraced more than 38.2% of the small 'c' wave down, it signaled that wave (2) was not compete.  

The development of the (c) wave of wave (2) appears to contain a number of triangles within it - signaling corrective behavior. Wave (c) has almost reached 61.8% of wave (a) as well as a slight breakout of the upwards channel. In addition, the MACD price oscillator on the 30min chart is divergent with the climb to new short term highs -an area of interest is certainly at hand.

It's possible that the (c) wave could end with a final triangle (sometime occurs as the last leg in more complex double and triple corrections) which is now almost complete, or with a slight push higher.

Once this (c) wave finishes, it still may complete only one leg in a much larger correction - hence, having 5 waves down (of 2 degrees of scale) will be important in determining the completeness of wave (2).


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## OzWaveGuy (10 March 2010)

In the previous post a possible end of wave (c) was discussed at around the 61.8% of wave (a) level. This didn't occur in addition to a lack of significant breakout of the wave (c) upwards channel.

Wave equality between (a) and (c) is now at hand, as well as a touch of the upper channel for the larger degree pattern. 

With the above wave equality, the next point of significant interest is now at hand as well as:


Today it appears 5 small waves down has unfolded (visible on a 5min chart) with a corresponding upwards correction. 
A break of the wave (c) channel has occurred
The MACD Price Oscillator is divergent on two levels - for the overall correction and the last 3 days

If this small 5 waves down evolves into a larger degree 5 wave formation, then this will help validate an end to wave '2'. Also, as discussed in previous posts, wave 3's should draw out a strong level of aggressiveness (in this case, to the downside) - hence a strong break down passing the recent wave '1' low will need to occur under this count.


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## brty (10 March 2010)

I was just following this thread through a bit of history to see how the 'count' had changed over time. I always find it amusing.

I came across this post by Motorway....



> Any LONG TERM analysis on Indexes is Suspect because of
> 
> "Permanence breakdown"
> 
> ...




I know I have disagreed with you before, but this is a perfect description of indexes , well done, sorry for not replying before.

brty


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## Sean K (11 March 2010)

brty said:


> I was just following this thread through a bit of history to see how the 'count' had changed over time. I always find it amusing.
> 
> I came across this post by Motorway....
> 
> ...



I hadn't seen that comment by motorway before but he has something in regard to the longer term movement you'd think. Just what is 'long term' in this regard though? A 20 year outlook?


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## brty (11 March 2010)

Kennas, the longer term view can be anything as it is the constant changes that has the effect. During every 'hiccup' in the markets the indexes change the most. For example the changes in the bottom 100 of the ASX200 in the last year have been breath-taking.

Even looking at the  ASX20 stocks, the changes over 20 years have had a remarkable effect. These were not in the index, AMP, CBA, CSL, FGL, MQG, ORG, SUN, TLS, WOW, WPL in the early '90's. A couple of others I have my doubts about also.

If EW, does not really work over the longer term because of the constant changes, surely the shorter term is greatly affected, to the point of skewing the count to make it less reliable  than a constant basket of stocks.

The use of indexes as a measure of how well a portfolio of stocks should be performing is one of the great lies associated with investments, perpetuated by financial advisors and media alike, to the detriment of a gullible public.

brty


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## Boggo (3 August 2011)

Yesterday's chart, the next 30 points may be significant if today's low doesn't hold up tomorrow.
The "Typ W5" area is 30 points either side of the 4370.

(click to expand)


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## Boggo (5 August 2011)

Boggo said:


> Yesterday's chart, the next 30 points may be significant if today's low doesn't hold up tomorrow.




That didn't hold so we are now looking at a different picture of what is occurring since last nights butterfly effect.
Looking at this complete down leg as an ABC, typical target for C hit today, next area is 3800 if the area around today's low doesn't hold up next week.

C = A at 4156.

(click to expand)


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## Boggo (6 August 2011)

Today's low was a significant area as at that point C = A (within 5 points).
The open this morning did leave a gap which the market may take a few days to fill, that should be wave 4, possibly another (hopefully short) down leg should then complete the 5 waves of C.

Hopefully that should see this corrective sequence out if not we are looking at a way to go to the next support/potential turning point.

(click to expand)


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## OzWaveGuy (10 August 2011)

Boggo said:


> Today's low was a significant area as at that point C = A (within 5 points).
> The open this morning did leave a gap which the market may take a few days to fill, that should be wave 4, possibly another (hopefully short) down leg should then complete the 5 waves of C.
> 
> Hopefully that should see this corrective sequence out if not we are looking at a way to go to the next support/potential turning point.
> ...




Boggo, Do you think the push lower is still corrective?


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## tech/a (11 August 2011)

OzWaveGuy said:


> Boggo, Do you think the push lower is still corrective?




What do you think?


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## Boggo (11 August 2011)

OzWaveGuy said:


> Boggo, Do you think the push lower is still corrective?




Just a quick look at the correction in isolation is still possibly an ABC with the Wave.4 and then the Wave.5 of C possibly dragging on well into next month.

Potential final low will likely be below 3800 but I suspect there may be a lot of posturing between now and then.

As an ABC this overall pattern is not that convincing either, the B just made it up to the min ret of 38.2% of A.

A scary view could be that we may be looking at W.3 of a 5 wave sequence playing out at the moment and if that is the case we could be looking at 3200 to 3000 for starters.

What do you and tech/a see ?

(click to expand)


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## Garpal Gumnut (11 August 2011)

It looks impulsive to me, on Joh Bjelke criteria,

"If it looks like a ......."

I'd be looking at a 3 of a 5

gg


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## tech/a (12 August 2011)

*TECHNICAL UPDATE*

The very very strong support from the lows in face of negative strength (at the time) from overseas markets has me seeing a low in place for the immediate future.
However I dont think one needs to rush out and buy everything before it races back up towards 4500.
In my view there will be quite some consolidation between 3900 and 4500 while the market sorts itself out.

*Boggo's* levels match the (4)s on my chart.


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## OzWaveGuy (12 August 2011)

Boggo said:


> Just a quick look at the correction in isolation is still possibly an ABC with the Wave.4 and then the Wave.5 of C possibly dragging on well into next month.
> 
> Potential final low will likely be below 3800 but I suspect there may be a lot of posturing between now and then.
> 
> ...




Thx Boggo, yes the 'C' leg may certainly play out in a 5 down, the next few trading days will clarify this point since the XAO is now at the touching the top channel line - so this will be wave '4'.

However, I'm not certain it's a wave 'C' down, but instead, may be a trend of larger things to come.


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## Boggo (12 August 2011)

OzWaveGuy said:


> However, I'm not certain it's a wave 'C' down, but instead, may be a trend of larger things to come.




Tend to agree, tech/a's chart above is the likely scenario that I am leaning towards at the moment.
Will be interesting to see what happens when the gap (circled) closes and 4500 is definitely the brick wall.

(tech/a, your chart doesn't seem to have that gap ? )

(click to expand)


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## tech/a (12 August 2011)

> (tech/a, your chart doesn't seem to have that gap ? )




Hmmm.
Dentistry perhaps.

I use data from Just data for Metastock/Aget
and Esignal for Tradguider.

All dont have your gap.
Maybe Im on a higher medical plan--no gaps!


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## Boggo (12 August 2011)

tech/a said:


> Hmmm.
> Dentistry perhaps.
> 
> Maybe Im on a higher medical plan--no gaps!




That could be it


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## captain black (12 August 2011)

Boggo said:


> (tech/a, your chart doesn't seem to have that gap ? )




Justdata use the previous days close as the opening price for indices.


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## Boggo (13 August 2011)

captain black said:


> Justdata use the previous days close as the opening price for indices.




Aha, interesting, thanks for that.


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## joea (15 August 2011)

data to 12th
This is my softwares 10cents worth.
joea


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## tech/a (15 August 2011)

Yes looks very much around the money


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## joea (15 August 2011)

tech/a said:


> Yes looks very much around the money




Thanks tech/a 
I was interested in a comment for comparison. Its hard to compare software otherwise.
joea


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## tech/a (15 August 2011)

Counts will differ from algorithm to algorithm.---person to person to if
done manually.
But although the count maybe slightly different the main 
focus (at this point until proven invalid) is that we are in a wave 4
with a wave 5 down to follow.
No need to rush in on those bargains.


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## tech/a (16 August 2011)

Well its pretty well hit the mark on the down side and now at the top (Possibly) of Wave 4, which is expected now to turn down and complete wave 5.
I expect this to be a slower fall.

Where's Kenna's
Elliott appears to be around the mark in this unfolding story!


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## Boggo (16 August 2011)

It closed the gap today with around 10 points overlap...
Previous post with gap - https://www.aussiestockforums.com/forums/showthread.php?t=15355&p=651815&viewfull=1#post651815

Behaviour after that is what often seems to happen in these situations.
I personally need to see a break below yesterdays low (~ 4255) before I am convinced which way next, having said that though, this arvo's action was definitely leaning to the downside.

If and when the down leg starts we need to wait until we see a day or two of upside within that leg down before we can narrow down reasonable downside target.

At the moment (assuming it does turn down) we are looking between 3873 and 3580 as a broad target area based on today's high being the turning point.

(click to expand - chart data at 15/08/11)


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## whitefang (18 August 2011)

Hi guys,

I am quite new to this forum, but I have been watching with great interest a few threads. A lot of great contributions, thank you guys. I pay attention to TA, as it gives me projections and levels to watch. With regard to EW, I think I understand the high-level principles but still trying to make sense of them, he, he...
Right now people seem to be waiting for w4 to finish and confirmed with a w5 leg down.
We seem to be close (50 points or so) to 0.382 or 0.5 retracement (depending on whether you consider the closing or intraday low). I imagine to higher we go, the less likely is that w5 eventuates. Is this right in the EW world ?
Also, technically, I believe we may reach a point of invalidation, in the 4500'ish area. Not that long to go...
Would it be possible that this is an ABC correction (similar to what we had in March, when also there was a tendency to wait for w4 and w5...until the market invalidated w4...) ?

See also this article...

http://www.minyanville.com/business...r-market-stock-market-bull/8/17/2011/id/36394

Fundamentally there is risk to the downside, but with so many bears out there, I am wondering whether the risk is not to the upside...

cheers,


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## Boggo (25 August 2011)

This is my view of where the market is at now.

Until the XAO can get back above 4500 the overall tendency is towards the negative with a potential downside target area highlighted.

Whichever direction it breaks (closes) out of the 0.382 to 0.618 retracement area should be an indication of the overall strength or weakness.

Just my 

(click to expand)


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## whitefang (27 August 2011)

Boggo said:


> This is my view of where the market is at now.
> 
> Until the XAO can get back above 4500 the overall tendency is towards the negative with a potential downside target area highlighted.
> 
> ...




Thanks for this.
With Fed's neutral stance, there is a good chance we will be range bound for another month, trapped between the 0.382 and 0.618. It also depends on how new data in US comes out. And Germany' vote (which I see as the biggest event to watch).


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## trendpicker (8 September 2011)

The market is moving sideways towards the indicated trendline. This could be interpreted as a complex wave (4). We see alternation between the simple Flat at wave (2) and the complex zigzag of wave (4) - which still needs confirmation. There should be resistance at the top trendline and the horizontal support/resistance line at 4450-4500. This should be telling. The market will either pierce through or turn down. The latter is the more likely scenario, I think.


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## tech/a (8 September 2011)

Agreed


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## Boggo (22 September 2011)

Today's break of the recent low at 4083 is another small step in the overall direction towards the target areas.
It will probably hover around or above the theoretical support of 4000 before it resumes the overall trend down.

I am still of the opinion that around 3600 is a likely target area.

(click to expand)


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## Boggo (23 September 2011)

Boggo said:


> It will probably hover around or above the theoretical support of 4000 before it resumes the overall trend down.




Nice dip today to within 6 points of the min W.5 target area (0.382% = 3951.68), now heading back to a comfort zone of nice round numbers around 4000 for a while.

(click to expand)


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## tech/a (8 October 2011)

Haven' posted up charts for a while as nothing much has altered.
*Here is an update.*









Frankly I see this starting to pull up.
As has been for sometime the first heavy line is critical to the validity of this count.


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## RazzaDazzla (9 October 2011)

tech/a said:


> Frankly I see this starting to pull up.
> As has been for sometime the first heavy line is critical to the validity of this count.




How likely would it be for Aus to de-couple from US and start trending higher while US continues down? Has this ever happened for a significant amount of time?


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## Muschu (9 October 2011)

tech/a said:


> Haven' posted up charts for a while as nothing much has altered.
> *Here is an update.*
> 
> 
> ...




Thanks Tech -- valuable stuff.


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## Sean K (10 October 2011)

tech/a said:


> Where's Kenna's
> Elliott appears to be around the mark in this unfolding story!



Sorry Tech. Been busy saving mankind. 

The unfolding story is still that we hit a W3 around 3800 and then have maybe hit a W4 around 4400 and heading down to a W5 right? That wasn't it at 4900 ish? 

Personally, without looking at a chart, I think the world is toast and if there is a QE3 without meaningful regulatory reform we will be nuked! Maybe that's just part of the waves however.


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## tech/a (10 October 2011)

Kennas

Until price action either plays out the wave 5 or negates the current count then we are still in the count we had for weeks now.
So to invalidate the count we need price above wave2
Or to complete wave 5 below or = wave 3


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## Sean K (10 October 2011)

tech/a said:


> Kennas
> 
> Until price action either plays out the wave 5 or negates the current count then we are still in the count we had for weeks now.
> So to invalidate the count we need price above wave2
> Or to complete wave 5 below or = wave 3



Yep, I see that. As I said above I think. 

You have said before that EW allows you to see where we are in the general trend of the market in order to make specific trading decisions. 

This is a hold until it plays out? Or, is it switch from short to long if it breaks up, or vicky versa?


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## tech/a (10 October 2011)

It's look for shorts or sell longs at close to wave 2 level
If wave 2 is taken out then re evaluate.


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## tech/a (22 October 2011)

*XJO I KNOW BUT.*


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## Ves (22 October 2011)

Does EW analysis have a relationship between time and wave targets? I just noticed that on the XJO weekly, the 5th wave looks like it could be the longest when measured in terms of time.


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## tech/a (22 October 2011)

There can be time components added to the analysis.
I dont use them.
The law of alternatives normally holds.
If Wave 2 is a simple correction then wave 4 will be complex.
Wave 3 cannot be the shortest wave and wave 4 must not exceed wave 1
(Just some basics) if they do then the counts must alter to accommodate the conditions.


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## joea (12 January 2012)

Hi 
On the other XAO thread was a mention of the 5th wave down(if there is one).

The EBOT may come into play if the top trend line rejects the price chart.
Anyway this is what the software is indicating (for what its worth.
joea


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## joea (18 January 2012)

Hi.
The XAO is attempting to push through the 144 MA plus a trend line.
We wait in anticipation?
joea


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## whitefang (18 January 2012)

Thanks for the last 2 posts.
I guess we may be getting (very)  close to a resolve.
Wondering what would trigger a confirmation of wave 4 in place and w5 forming ...?
Maybe a total breakdown of the negotiations between the Greek government and its creditors....or maybe even some uninspiring profit results in the US...

cheers,



joea said:


> Hi.
> The XAO is attempting to push through the 144 MA plus a trend line.
> We wait in anticipation?
> joea


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## joea (19 January 2012)

whitefang said:


> Thanks for the last 2 posts.
> I guess we may be getting (very)  close to a resolve.
> Wondering what would trigger a confirmation of wave 4 in place and w5 forming ...?
> Maybe a total breakdown of the negotiations between the Greek government and its creditors....or maybe even some uninspiring profit results in the US...
> ...




whitefang
I think the elliott wave software can be tricked by the market on occasions.
The "wide spread" bar on the 9/8/2011 may have tricked the software.
If this bar was not as low, the software would give a different structure.
One would think something will give today.
On one hand the Dow is up 88, but on the other, the world bank is "bleating" gloom and doom. I think Angela Merkel is playing politics with the Euro, instead of helping solve the problems.
No wonder the traders are confused.
joea


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## whitefang (19 January 2012)

Joea,

I do agree that people should take the output of the software with a grain of salt. But it gives you something you can use as a basis.
I personally do not use such a software. 
I do listen though to people that comment on EW, whether through their own lines drawn on charts or software output. It is an interesting angle.
My comment that (very) soon we may see a resolve is based on a few other observations (low VIX for a too long time, the symmetrical triangle looking for a breakout, etc ). It remains to see which way markets go.
I am a contrarian at heart, and seeing more people waiting for a "healthy" pullback makes me think that the market may go another leg up instead.

cheers,



joea said:


> whitefang
> I think the elliott wave software can be tricked by the market on occasions.
> The "wide spread" bar on the 9/8/2011 may have tricked the software.
> If this bar was not as low, the software would give a different structure.
> ...


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## StumpyPhantom (18 May 2012)

Any Elliott wave chartists care to update their graphs and post here in light of recent developments?

I suspect this theory is about to come into its own about now?

Thanks in anticipation


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## Sean K (18 May 2012)

StumpyPhantom said:


> Any Elliott wave chartists care to update their graphs and post here in light of recent developments?
> 
> I suspect this theory is about to come into its own about now?
> 
> Thanks in anticipation



yes, good timing
.


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## rimtas (23 October 2014)

I just have found this thread so I'll be posting my charts here instead where I started  there  https://www.aussiestockforums.com/forums/showthread.php?t=4888&page=471&highlight=xao
 People with really good knowledge how to use EW can join this discussion, others please just read.


XAO is rising impulsively from the bottom and I am looking for wave (a) top to form soon, somewhere in a fib 50-61,8 range. There is still no any comfortable count for wave (a), which means it is not finished yet. Momentum at the bottom of chart shows no brakes or at least neutral gear is in the works for this rise which are usually applied by the markets when they get tired.  
One observation is that this wave is really big in terms of price(but not time), leaving not much room for wave (c)(after setback). But that's a different story and markets will tell later what they think. I expect wave (b) will be the longest wave in this sequence, with wave (c) being a swift affair ending in a spike, or sporting an ED.
 Not tradable at this stage.


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## rimtas (30 October 2014)

I don't know how to label ASX at this stage, but E-mini has quite a nice structure at the moment and if it turns, it would be from here. 
However  if it rises at least 30 more  points, then new highs probably is at hand(after pulback).
 What I am looking is a third wave, and all ellioticians know what it means, it is better not to be caught by it. 








When looking at daily/weekly ASX recent rice looks too short in terms of time, and maybe even price, though as at today it already corrected back to the fib 61,8 level, where at least wave (a) could end.


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## Porper (31 October 2014)

rimtas said:


> I don't know how to label ASX at this stage, but E-mini has quite a nice structure at the moment and if it turns, it would be from here.
> However  if it rises at least 30 more  points, then new highs probably is at hand(after pulback).
> What I am looking is a third wave, and all ellioticians know what it means, it is better not to be caught by it.
> 
> ...




Your wave (c) is about 10x as long as wave (a)? As far as I am concerned the XJO chart is a mess from an Elliott Wave point of view. Best using other technical analysis; or waiting for the patterns to get back into sync.


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## rimtas (5 November 2014)

Looks like XAO has a countable structure at this stage.  I think this is the last chance for the market to prove the bearish count, because it has already corrected  more than 70% of the previous drop, and most importantly- _in three waves_.
It must not rise above 5517 for this count to stay in operation, and furthermore-it must create a massive kick-off to the downside catching everyone by surprise.  







But to be frank, I already doubt this bearish scenario, because  some heavyweight stocks like TLS, WES, CBA has already risen in 5 waves from the bottom, not to mention REIT sector, which  has fallen only in three waves , not confirming ASX previous drop.  

If ASX rise further, It will sport a (v) wave from the  12 Oct bottom, and this just can't  be wave (a) of the bearish count because it doesn't leave a room for wave (c).

This means that a five wave  Aug-Oct drop  is a terminal wave of a larger 3-3-5 sideways correction, and this will even change the whole count from 2009 bottom, which implies a further bull market.  

So basically the next few sessions market will decide what it wants to do-stay in bull, or start a larger bear.
I am in cash at the moment, waiting how things will play out.


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## Porper (6 November 2014)

rimtas said:


> Looks like XAO has a countable structure at this stage.  I think this is the last chance for the market to prove the bearish count, because it has already corrected  more than 70% of the previous drop, and most importantly- _in three waves_.





I think it's important to admit when you are wrong. Don't get like Prechter and stick with your previous predictions just for your ego.

 I see you have changed waves (a) & (b) slightly but wave (c) still shows no symmetry with prior waves. That count is not correct i.m.o. However you are entitled to stick to your guns. That count will be invalidated soon.


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## rimtas (6 November 2014)

Porper said:


> I think it's important to admit when you are wrong..




I am wrong only then when I have to realize a loss.  When I sell shares with a profit-this means my counts are perfect.  I do not remember when I have had a sizeable loss, to be frank. 

Since I implemented EW into my trading as the only decision making tool, losses got very small, and very rare.  So it doesn't matter which count is correct, which is wrong, what people are thinking about them and what comment they are making _after the fact._ 

The only thing what matters is that regardless to which count you stick to  as long as it makes money for you consider it correct.  Currently I am in cash, this means that I do not see any count that I can put my money upon it with confidence.  That's why you see two charts, not one.

By the way, I do not see yours, mate.


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## Porper (6 November 2014)

rimtas said:


> I am wrong only then when I have to realize a loss.  When I sell shares with a profit-this means my counts are perfect.  I do not remember when I have had a sizeable loss, to be frank.




The thread is called "Elliott Wave and the XAO". It has nothing to do with your losses. All about the wave structures. To say you make perfect counts is a joke. Nobody does.



rimtas said:


> Since I implemented EW into my trading as the only decision making tool, losses got very small, and very rare.




I don't know any traders or investors that make consistent profits using the Wave Theory as a standalone method. I have seen many try - including myself. There are too many other factors that have an influence...volume, time etc. to name a few. You make it sound like you have found the Holy Grail. You haven't.


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## rimtas (6 November 2014)

Porper said:


> I don't know any traders or investors that make consistent profits using the Wave Theory as a standalone method..




Say hello to rimtas and you will know one.
I tried everything-news, fundamentals, volume, breakouts, ema's and many other stuff-never  was loosing money so fast by using them.  

Standalone EW is working like a clock. You put your money in the market when it reaches the point of "no other counts possible". It is the main rule trading EW. Most of the time there are alternates, but in rare moments they exist only with a 1 chance out of 100. 

You can check the NAB thread where I mde a call and put almost half million bucks on it. Didn't lost a dime on it-it was a short term perfect count and entry, using a standalone EW. That's how I trade, 5 to 10 trades per year, waiting for the perfect setup, no losses. You can call it Holy Grail, I call it patience and and strict MM.

I see you are more a teoretic than trader, but then I don't get the point why use something that you can't nail till the end. No offence mate.


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## Porper (7 November 2014)

rimtas said:


> That's how I trade, 5 to 10 trades per year, waiting for the perfect setup, no losses. You can call it Holy Grail, I call it patience and and strict MM.




I will leave you to it. You obviously aren't a serious trader or investor. You are just on an ego trip. Good luck if it makes you feel good about yourself. My last post on the subject.


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## tech/a (7 November 2014)

Its been great to sit on the sidelines and watch this un fold.

Seen it many many times.

Elliott Analysis evokes a great deal of passion from hard-line exponents.
Truth is that very few people in the general populace even remotely understand the method and are quick to judge and more often than not pointing out how hopeless it is as an analysis tool because the wave count changes.

*WHEN IN FACT* I see this as the greatest strength of the analysis.

Ive spent many months over the last 20 yrs studying and implementing Elliott.
*In fact it was Elliot Wave Analysis that warned* me to halt my portfolio trading within my method "Tech Trader"
Months before the GFC. There are lots of posts at the time on my decision and the analysis both here and on "The Chartist"
Saved me a great deal of $$s.

Rimtas has obviously chosen Elliott as his specialty.
Porper who I have known for years is no slouch when it comes to Elliott.

My view is that if the wave counts aren't as clear as day then I ignore them and us other analysis.
I don't force a count and am aware that the three of us could all have a very different count.
Its been my experience that it doesn't matter.

But its also been my experience that die hard analysts tend to just analyse and have very little expertise in implementing Elliott as a trading method.
If you *cant apply* the analysis --- what's the point 

Personally I'm glad I spent the time to understand the analysis and wouldn't make a longer term decision without applying it.

Keep up the discussion guys---I agree with both of you on a lot of the discussion.

Like Elliott Analysis you/we will agree and disagree.


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## rimtas (7 November 2014)

Hi tech, glad to hear from someone who understands the importance of EW not only in stock markets, but in life as well. Many people are unconfortable with EW  but I personaly found it as the best aproach to the markets. 

In previous post you told that when count is unclear you just leave it. And that is right. But I've found this "unclear" issue very important. If you are in the market, most likely you entered it when count was more or less clear. 
When the wave develops, it passes through stages and from the midle to the end of  wave 3  there are the greatest amount of alternatives possible. Later when the wave develops, alternatives lose ground one after another and finaly you can see 5 waves, that's when the count becomes clear. This is also true at the bottoms when first wave made it's way-then it is clear and highly tradable.   In correction-it becomes more clearer when it's near the end, in the middle you can be short of your fingers to count alternatives.

When I am in the position and situation becomes unclear, this means only one thing-hold on to it, because you will se the pattern sooner or later which you can use as a ground for decision making. This approach makes holding the stock quite comfortble and enables to see movements against you as _normal_, when everybody around are just like lost sheeps-they seek reasons for the decline instead of knowing that their stocks are within the normal market cycle.

Anyway, glad to see you here... 
How you see All Ords from here? Looks like it made five up from the most recent bottom...

Few months ago I thought that Ending Diagonal is in the works, it was quite a good call ( https://www.aussiestockforums.com/forums/showthread.php?t=4888&p=840431&viewfull=1#post840431  ) , I remebmer sold everything just days after the top was formed, but the nature and size of the decline just fell short of targets that are usualy reached after ED . Instead market rallied and here we go-5 waves up, TLS at new highs, real estate at new highs...

I am thinking that three waves from the 2009 bottom was not the finished development in the light of most recent rise, which I am prety sure, has more to go. This will put us in the stage of "unclear" for a few years, but best what comes to mind is that some sort of third wave can develop with ATH on the horizon.






I am tracking a few posibilities, that's one in a Chart above-((1))-((2))-(1)-(2), or ((A))-((B))-(1)-(2) of ((C)), but both implies the same thing-higher prices. The question is : 
Does this  correction is over? It can easily sport another 3-3, or 3-5 making to the lower ascending support. The first sign of significant leg up would be making to the ~6000 I suppose.   It's pitty that I don't have Zweig Breadth Thrust on ASX but I feel this rally could have trigered the event.

When I realized that the latest decline was just a part of 3-3-5 flat, I remembered the DOW at the time 2011, I was trading full time then in US when the same thing happened- It just reminded me once again that_ if market reached new highs in Three waves_, always be suspicious about the five wave decline. 






Many people will seek reason as to what must happen for markets to reach ATH. But the reasoning should be opposite-what events can be trigered by rising optimistic market mood. Could be plenty, pick one...

From fundamental view it could be the Iron Ore making the bottom, along with China  in the early stages of advance, those events could triger a mining sector rally. 











The price action in Australia's largest mining company, BHP, sugests that the stock could be in a Triangle formation, which is Primary wave ((4)).
Looking at the fact that BHP is trading close to the long-term trendline support, The Triangle maybe over, and we could expect a thrust to new highs, which will support ASX advance scenario as well. Another case is that Triangle is still in the progress and it could take for the market years to finish it, but both ways advance will follow soon(here is the alternate count :   https://www.aussiestockforums.com/forums/showthread.php?t=1335&p=840445&viewfull=1#post840445   )





Also, the company in August announced that it would spin off about 8% of assets as a separate company-the industry's largest spinoff in a decade, according to CLSA Asia Pacific Markets. BHP continues the industry's process of deleveraging . In January 2013 I observed how four major mining companies, including BHP, had fired their CEOs in just four months following the Wave (C) low within BHP's wave ((4)) Triangle. All four former heads had been appointed near the peak of the mining boom in 2007, and each pursued growth aggressively.

BHP's announced spin-off shows that pessimism about the mining industry remains entrenched. Company's CEO told analysts on August 19: "We are now at a point where the status quo no longer positions us to best maximize value. Change is required."  Analysts expect other industry titans such as Rio Tinto and Anglo American, to follow BHP's lead spin off assets of their own.

But from contrarian perspective, a bearish consensus is often a bullish signal for the strongest companies in an industry. The pessimistic sentiment may even support an approaching low in some resource markets important to Australia, such as Iron Ore(see chart above)

Australia's main customer China, shows no signs of reducing its consumption of commodities anytime soon. As Bloomberg reported in late August- _"Qinhuangdao, home to China's largest coal port that's been called an indicator of Asia's biggest economy, is set for record commodity deliveries over the next three years as urbanization boosts demand for the fuel". _
But even if mining prices remain soft, the strongest companies can continue to grow. BHP's own price history provides a case in point: during the commodity bear market of the 1980s and 1990s, the company's stock price increased about sevenfold.


I also would like to remind about how the Abbott government proposed its budget in May to greater uproar. The Washington Post claimed that Abbott has quickly become one  of the world's most hated prime ministers after he "unveiled" a draconian austerity budget that analysts at that time called the most extreme and least popular of the past four decades in Australia" . His approval rating plunged to 30% after the announcement, according to Newspoll.

The Prime Minister defended himself by pointing out that support fell for former Prime Minister John Howard after he introduced an austere budget in 1996, which preceded a "decade of prosperity". From a socionomic perspective, the analogy could turn out to be prescient. 

Austerity drives are a product of the fear that attends the late stages of larger degree bear markets. For example, Europe's austerity  budgets of a few years ago followed large-degree stock market declines. So has China's crackdown on government excess over the past two years.  In June, the new prime minister of India where, by mine wave counts, a bull market is just ramping up, announced that the nation's government ministries will be consolidated and the number of cabinet ministers reduced from 72 to 45. 


The Hovard government passed its budget in 1996 early in a multiyear uptrend in the All Ords.  Abbott's  government austerity measures provide me  an anecdotal evidence to support long term bullish forecast for Australian stocks. 
The wave count above indicate the market to be in a similar position at present paralleling long-term uptrends in most other stock markets in the Asia-Pacific Region.


Also, I remember what  CB governor said just two months ago in his semiannual testimony to a parliamentary economic committee:_ "The thing that is most needed now is something monetary policy can't derectly cause: more of sort of 'animal spirits' needed to support an expansion of the stock of existing assets"_

My wave count above shows that those spirits are about to burst higher in a third-of-a-third advance.

Cheers


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## PennD (9 November 2014)

View attachment 60182



Hi Rimtas,

Why could this not be seen as a larger degree ending diagonal? 
Cheers Penn


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## rimtas (9 November 2014)

Hi Penn, 
Ending Diagonals are ending patterns, they appear only at the end of the five wave move as the fifth wave _in an Impulse wave,_ usually when a third wave is extended. And their internal subdivisions should all consists of "threes".  Also- as Index is an average representative of its constituents, many stocks should also reflect Ending Diagonals in their charts. It's not the case now.

Cheers,


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## rimtas (12 November 2014)

Latest Westpac/Melbourne Institute consumer sentiment survey shows pessimists outnumbering optimists in October for the _ninth consecutive month,_ the longest run since the global financial crisis.

Also, ABC News just released a new survey for the Museum of Australian Democracy which showed that while Australians of all ages still embrace democracy and value its history of freedom and stability, they are disillusioned with contemporary politics and _support radical reform_.

"They associate [politics] with untrustworthy politicians," said Professor Mark Evans from the Institute for Governance at the University of Canberra, which designed and analysed the survey for the museum.

Professor Evans said short-term policies dominated by elections, the media and big business have left the vast majority of Australians feeling politically powerless.

"Eighty to 90 per cent of Australians _believe_ they have little or no influence over national decision making," he said.


From a socionomic perspective those negative trends of  _how people feel_, makes complete sense: they reflect an extreeme negative  sentiment towards the wave (2) bottom.
One year market went nowhere. Sideways movements are doing the same to people as sharp corrections, just they take more time. Prices stay high, but sentiment drops. This indicates that the larger degree correction is in the works, and from a contarian perspective, an extremity in the above figures could be another bullish signal sending a mesage that an Intermediate Degree advance is not far away.


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## rimtas (13 November 2014)

I'll post a futures  hourly chart as it has clearer waves at this stage than cash index. 
 After rising in five waves from the bottom, index made a three wave drop,  a three wave rise to new higs and then started to decline impulsively. This development is an expanding flat (3-3-5). Those kind of flats are very common in strong trends. 

Wave (c) of  a flat still has some more subdivisions to be valid as  a "five". Using a changeling technique I expect a rise tomorrow to approx. 5480 and then drop on Monday to 5410. Cash  bottom would be equivalent to  5380, or fib 38,2% retracement is at 5370. 

 If this expanding flat is not a part of a double three, after the wave (c) bottoms out, I expect a strong rise towards a previous highs achieved a few months ago.

  It is not clear at this stage whether the rise from the Oct bottom is wave ((a)) or wave ((i)) , but probability that Intermediate Wave (3) has started are quite high. What happens when market reaches previous highs will determine the final count which still has a possibility of a double three  as Wave (2), this means that one more leg down(approx.10%  on the Daily chart, see above ) would come.

Cheers,


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## rimtas (15 November 2014)

One more bullish signal appeared in the press recently. You will not find those kind of statements near the tops.

_"Australia is headed for recession and nothing can be done to stop it", _a prominent economist warns.

The mining boom has bred complacency over the past decade and it's now too late to avoid a recession in 2015, says Saxo Bank chief economist Steen Jakobsen.

_"It's too late, the wheels are in motion," _Mr Jakobsen told AAP.


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## rimtas (19 November 2014)

The decline on a larger timeframes like 4H and Daily already looks like a "five". RSI in uptrends usually stays above the ascending line on Daily so I think it is not much left for it to go down. 

50% retracement is at 5320 and it could be reached within days.  I am tracking an Expanding Flat scenario as a second wave  and looking for a bottom very soon. The five wave rally in a smaller time frames will confirm the next rise is underway.  I am going to buy a few banks there.


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## rimtas (21 November 2014)

Today market decline developed to the point, where a number of factors are pointing that the bottom is in or very close. 

Decline from the top retraced almost 61,8%, (which is typical if this is the second wave). it was shy just 8 points to exact fib level of 5276;
Wave subdivisions on smaller time frames can be counted as "five", where the fifth wave is extended;
The whole cycle(advance+ decline) from Oct 13 bottom subdivides into the Fibonacci time section itself, with market rising 19 trading days, and falling 11 to date. The exact ratio of 0,618 would be 11,742 days, so this tells that Monday could be a small final dip and then a rally starts.

All of this is highly speculative, but it is the best setup since decline started so far. Now Market needs to sport five waves up and break the trendline which would be above 5350 level in order to confirm a bottom.  If this is not going to happen soon and Market breaks lower, then the cluster of combinations pointing to _something_ will be gone. 

I can compare this situation with a turning vehicle-it's indicator is on, but will it actually turn? We'll see soon. If it turns, buying opportunity is close. 

Cheers,


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## rimtas (26 November 2014)

Looks like the bottom is in and market  started to pick up speed upwards. What comes next and what kind  of wave is developing will be seen in the nearest future, especially if All Ords manage to climb higher to new highs above 5565 (futures chart).  It is probably third wave developing, but no confirmation at this point.   

It is interested from EW point of view to see how futures and cash index sport different waves, but both arrive at the same point with complete structures, just different counts. Cash index sported an expanding flat(chart above in previous post), while futures double three-expanding flat plus zigzag. 

I expect market to rise further from here.


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## tech/a (26 November 2014)

rimtas said:


> Looks like the bottom is in and market  started to pick up speed upwards. What comes next and what kind  of wave is developing will be seen in the nearest future, especially if All Ords manage to climb higher to new highs above 5565 (futures chart).  It is probably third wave developing, but no confirmation at this point.
> 
> It is interested from EW point of view to see how futures and cash index sport different waves, but both arrive at the same point with complete structures, just different counts. Cash index sported an expanding flat(chart above in previous post), while futures double three-expanding flat plus zigzag.
> 
> ...




If it is a wave 3 ---happy days its going to be a good'n


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## PennD (27 November 2014)

Hi Rimtas,
So why would this not be seen as a wave 3 down in the making, with Octobers low being I, Nov high being II (back test of the ending diagonal) and now entered into III? With the US and DAX going up, up, up these last 6 weeks or so surely they are about to turn also, even if its just for a while?? I don't see the asx beginning a wave III higher in these conditions.
You are obviously well versed in Elliot wave. Professionally taught even??? Just a few weeks ago you were calling a P3 down on US indexes, (which they busted through to the upside) now your calling a wave III up in asx?? 
Dood, you sure can be confusing?
Cheers


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## rimtas (27 November 2014)

Hi Penn,
 Yes, a few months or so ago I was calling on US down    https://www.aussiestockforums.com/forums/showthread.php?t=4888&p=840870&viewfull=1#post840870

It turned down and dropped the most in two years, in a crash manner. But a very important thing happened-it failed to do so in five waves, and from that juncture it completely changed the long term outlook, because only from the point where the top was(see chart in the link) DOW had the last possibility to prove or disregard a bearish scenario-wave structure was good for this to happen. 

The same with ASX.   I thought it was Ending Diagonal at the top of three wave structure from 2009, but they produce a swift moves to the downside, It is very rare for the outcome to backtest almost previous highs with a proposed second wave, as you suggest. Moreover, A rise from the Oct bottom was a five also, meaning a change in trend. Financials, real-estate ad mining's all fell in three waves from this year's top and many stocks are at new highs already. 

So the same as in US, long term outlook changed with this little move. I am early, but odds are high.  It is enough to see an Asia-Pacific(ex Japn) index, which is moving in a series of one's and two's. 

I do not say that the market will shoot upwards straight to the 2007 top, probably it will do this in the next couple of years, also sporting another smaller series one's and two's, because the real third waves  are starting only at All Time Highs.   So everything can happen at this point, but the odds for bearish scenario has shifted greatly.

I started to buy stocks , especially banks, though the wave structure of Financials would look better complete with another move down of 3-5% in some stocks. But better to be early than late.  


I am aware of a possibility of the scenario you suggested, but I learned to recognize the waves early in development combining the picture of many stocks, and many of them are not aligned for that.  Third waves down,  (as a third up), are the unexpected move, catching everyone by surprise.

 With market sentiment already bearish enough after year long no-go anywhere, the surprise for the market would be definitely to the upside, maybe the mid of next year will present this opportunity. 

 For now, I am waiting for a third wave or (c) (circled) of a smaller degree, do not be confused with Intermediate or Primary waves, this is not a degree I am talking about, though it can happen from here.  I just expect banks to rise 20% and I get out (depending on a structure) sometimes in the first half of 2015.

Hopefully this explanation satisfies you, but you are not obliged to believe me, I was wrong before. And when I am wrong, my stops are usually triggered. When they are triggered, the count changes and it means that it's time to make money in other direction. I am in the markets only by one reason-to make money. Not to be right or wrong.

Cheers,


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## rimtas (3 December 2014)

Market failed to move in five after the Nov 21 Bottom I discussed above. Instead, it sported another impulse down, which I see as a wave (c) at this stage. The most recent rally sported "five" up, which adds confidence that the bottom is in. For a confirmation prices should rally above wave (b) top of 5395 in order to eliminate other alternate bearish scenarios. 

If this is a start of another leg up that goes beyond this year's high, now it's a screaming buy.
 I hold WBC, WESDD, ANZ at the moment, all bought at the wave (a) bottom, but remarkably banks have been holding pretty steady during wave's (c) drop, creating a fracturing market which lifts my confidence that the count is correct.
 Property sector is at new highs, this won't be possible if the market would be at the edge  of third wave point of recognition down, as some people suggest to count waves. It is possible, but I'll take risk here on the upside.


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## PennD (4 December 2014)

The price action in Australia's largest mining company, BHP, sugests that the stock could be in a Triangle formation, which is Primary wave ((4)).
Looking at the fact that BHP is trading close to the long-term trendline support, The Triangle maybe over, and we could expect a thrust to new highs, which will support ASX advance scenario as well. Another case is that Triangle is still in the progress and it could take for the market years to finish it, but both ways advance will follow soon(here is the alternate count :   https://www.aussiestockforums.com/forums/showthread.php?t=1335&p=840445&viewfull=1#post840445   )


View attachment 60181


Also, the company in August announced that it would spin off about 8% of assets as a separate company-the industry's largest spinoff in a decade, according to CLSA Asia Pacific Markets. BHP continues the industry's process of deleveraging . In January 2013 I observed how four major mining companies, including BHP, had fired their CEOs in just four months following the Wave (C) low within BHP's wave ((4)) Triangle. All four former heads had been appointed near the peak of the mining boom in 2007, and each pursued growth aggressively.

BHP's announced spin-off shows that pessimism about the mining industry remains entrenched. Company's CEO told analysts on August 19: "We are now at a point where the status quo no longer positions us to best maximize value. Change is required."  Analysts expect other industry titans such as Rio Tinto and Anglo American, to follow BHP's lead spin off assets of their own.

But from contrarian perspective, a bearish consensus is often a bullish signal for the strongest companies in an industry. The pessimistic sentiment may even support an approaching low in some resource markets important to Australia, such as Iron Ore(see chart above)




Good morning Rimtas,
First up, thank you for answering my other two questions 
Does it not bother you that BHP has broken the lower trend line on this chart you posted on the 7th?
Cheers Penn


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## rimtas (4 December 2014)

Hi Penn,

Yes, BHP has broken a long term trendline last month.  I am not worried much about this development, as Triangles can brake channels. There are many cases when Triangles were trading below the trendline and the last wave (usually fifth) was thrusting to new highs only to backtest the additional  line  from below.

One good example can be EUR/JPY chart, where exactly this has happened. 







When you look at long term BHP chart there was an overshoot of the main Channel in 1983 and stock traded below for a few quarters before it returned back. So market seems to consider this as an  important thing and thus I added one more overshoot trendline to the main channel. Today BHP still trading above it.












I must note that playing with intervals so long, all trendlines have a slight chance of an error, because I don't have an interactive chart from 1974 low. My trading platform only gives data from 1984 so even slightest discrepancy in drawing a trendline can give an error of 5-10% in stock price today. I did my best, but I can't guarantee on the exact position of those lines. So please take it with a bit of salt. If someone have an interactive chart from 1974, don't hesitate to post it here with an exact lines.


Zooming in todays position and giving the trendline a closer look, we can see that there is a bit of space for a down move in order to test that overshoot line.  Within a Triangle, wave C would be equal 61,8% of wave A at $28,5, which is somewhere very close to the overshoot line. If market ends Intermediate wave (C) at this point, I consider that the whole structure will remain within the long term channels right to the end in the years to come. 

I do not like much how waves looks within  wave A, but it is one way to label them as complete. With Iron Ore so close to the bottom(I think somewhere above ~60 next year) and China's Hang Seng Impulsive advance that started mid of last year, I  think that BHP doesn't have much room for a significant decline.  If all lines are to be broken, the last defence  is $23 area where the long term Triangle pattern will still look in progress and valid.
And if All Ords already started it's new Medium term advance, it would be hard to any blue chip to move down against the main trend.


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## rimtas (11 December 2014)

Today was another important day, most likely marking another important bottom, hopefully this time for good.  Wave structure looks complete as double three ( w-x-y), and not much room left for the count to disintegrate into bearish one shown in red(as an expanding flat which looks a bit awry to me). The key level is today's low of  5168,4 which if breached will probably hit the Oct 12 bottom of 5121 and go under.

But today market seems to sport five wave intraday rally from the bottom, and this could indicate that the bottom is in and wave ((iii))(circled) up has started. Also, the whole cycle advance +decline subdivides into (close to) Fibonacci numbers of 21 and 21+1 of total days traded. This setup along with complete countable wave structure most likely is pointing to something important. Basicaly it is the best risk/reward ratio setup in the whole year with just ~30 point risk and at least ~600 point reward, if buying directly index ETF, CFD or futures.











I also would like to point out to 3 banks which I follow, due to their structures entering in the terminating waves of their respective patterns, which are all Running Triangles.  I can allow for a little bit more downside to reach (or even slightly breach) the lower lines of the pattern in wave (e), which translates into 1-2% downside. But the same as ALL Ords, they can start a rally as early as next week, which confirms that new phase of advance has started. 

I hold all 3 banks, BOQ bought today at 11.88 and the other two a bit earlier which are about 0,5% in the red.  The best structure which looks as close to complete as possible is WBC. Other two banks can make a slight dips under todays lows.

I am also monitoring NAB which is thrusting down from expanding triangle at 1H interval and should find a bottom closer to 30,7 area. 

Cheers,


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## rimtas (14 December 2014)

New lows in Asia-Pacific region suggests that before wave ((iii)) begins, the larger degree  correction will take more time. Next week will be the key that determines medium term trend in stocks(next few months)



	

		
			
		

		
	
.


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## pavilion103 (14 December 2014)

Gee this is such a crucial level.

I enjoy reading this stuff on EW in addition to my trading strategy. It can help paint the larger context. I don't put heaps of weight on it but do think it can be quite useful.


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## IFocus (14 December 2014)

Like your work Rimtas keep it up


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## rimtas (17 December 2014)

It is surprising to see how Hang Seng, Nikkei and DOW are colapsing (in a shorter time frame), but ASX is holding ground... Still no new lows. Basicaly tomorrow is the day, do or die for wave ((iii)). Personaly I already do not believe this scenario is about to happen, but that's how market works near the low of second wave-it seems gloomy everywhere... 
But if lows are to be breached, market could generate a point of recognition, which will turn overal sentiment from bullish to bearish, and immediately changes a countable structure to the point where are many alternatives, and most of them bearish. I discuss this later when the waves unfold, but personaly I hold stops just below recent lows.


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## rimtas (20 December 2014)

Anyone who believes that the economy in China is slowing down must look more closely at the Shanghai Composite. Yes, it has about 4 years of bear market since 2010, which is reflected in the slowing economy, but this is only the consequence of bearish sentiment, which is now in the past.  Though many analyst see a recent slowdown as a cause, and they beleive it is bearish. But the oposite will happen.

2014 was extremely good for China, sentiment completely reversed it's course and the economy will follow soon, most likely in 2015  we will see improvements in China's economic figures. This means that demand for goods will increase, and this leads to think that many stocks related to China will rise.  Be carefull while shorting resources, when they bounce back, the rally will be sharp and scarry for bears.


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## rimtas (22 December 2014)

First pivot point of 5380 was taken out today, eliminating an immediate bearish scenario. Price action  suggests that wave ((iii)) of 1 has started. 
 Confirmation of wave ((iii)) scenario would be when previous top of 5524 is taken out also.  This confirms that the market started new Impulsive advance which would carry prices well above 6000. With commodities bottoming, this scenario has high probability.


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## tech/a (22 December 2014)

Great analysis.
A very good Xmas scenario!

Thanks for the time you put into this.
Opportunity is now!


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## PinguPingu (22 December 2014)

Great stuff, Rimtas. :wreath


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## PennD (23 December 2014)

rimtas said:


> First pivot point of 5380 was taken out today, eliminating an immediate bearish scenario. Price action  suggests that wave ((iii)) of 1 has started.
> Confirmation of wave ((iii)) scenario would be when previous top of 5524 is taken out also.  This confirms that the market started new Impulsive advance which would carry prices well above 6000. With commodities bottoming, this scenario has high probability.
> 
> 
> View attachment 60851




HI Rimtas,
What do you think of this count by DK 


Merry christmas

Penn


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## rimtas (23 December 2014)

Hi Penn,

That count has a low probability, as (b) wave can't make double bottom in this case.  This can happen only when (a) wave is "three", making the whole correction 3-3-5. But in this case I find hard to count that wave from Oct low as "three", it was just a plain Impulsive advance, it doesn't look corrective. That's why I labelled it wave ((i)) circled.  
If you see my earlier posts, I had an alternative count by labelling waves as "((i)) or ((a))"  and "((ii)) or ((b))", but when market declined to almost previous lows, ((b)) wave was eliminated, as ((b)) waves do not decline so low, when the previous wave was Impulsive advance ("a five"). 

So the probability is higher for a ((iii)) wave than for a (c) in your count, you don't want to be short in a third wave, as it can go beyond your account's margin levels before it finds a correction.

Though I admit that waves would look best, if we could have one more new low before a rally, especially by looking at the larger time frames. An example count would best look like this, with market somehow reaching and testing the lower  trendline from 2009 low. This is a classic behaviour in accelerating market: 








I also noticed that there are two good fractals, that look good even in a larger time frames. And most importantly they are in line with EW count. These kind of setups are rare, and they have very high probability to be correct.
 Fractals don't tell how high market will go, they just point to direction. EW can tell how high in this case, but first we need to see ASX above 5690, where buy signal would be generated for majority of investors and all bearish alternate scenarios were left behind.

I invested 30% of my assets in this wave, this basically tells that I am 30% bullish on market in this stage.


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## rimtas (23 December 2014)

Nice article to read for everyone(from B. Prechter):

*What a Trader Really Needs to Be Successful*

Ever since winning the United States Trading Championship in 1984 , subscribers have asked for a list of "tips" on trading, or even a play-by-play of the approximately 200 short term trades I made while following hourly market data over a four month period. Neither of these would do anyone any good. What successful trading requires is both more and less than most people think. In watching the reports of each new Championship over the past three years, it has been a joy to see what a large percentage of the top winners have been Elliott Wave Theorist subscribers and telephone consultation customers. (In fact, in the latest "standings" report from the USTC, of the top three producers in each of four categories, half are EWT subscribers!) However, while good traders may want the input from EWT, not all EWT subscribers are good traders. Obviously the winners know something the losers don't. What is it? What are the guidelines you really need to meet in order to trade the markets successfully?

When I first began trading, I did what many others who start out in the markets do: I developed a list of trading rules. The list was created piecemeal, with each new rule added, usually, following the conclusion of an unsuccessful trade. I continually asked myself, what would I do differently next time to make sure that this mistake would not recur? The resulting list of "do's" and "don'ts" ultimately comprised about 16 statements. Approximately six months following the completion of my carved-in-stone list of trading rules, I balled up the paper and threw it in the trash.

What was the problem with my list, a list typical of so many novices who think they are learning something? After several months of attempting to apply the "rules," it became clear that I made not merely a mistake here and there in the list, but a fundamental error in compiling the list in the first place. The error was in taking aim at the last trade each time, as if the next trading situation would present a similar problem. By the time 16 rules are created, all situations are covered and the trader is back to square one.

Let me give you an example of the ironies that result from the typical method of generating a list of trading rules. One of the most popular trading maxims is, "You cant go broke taking a profit." (The brokers invented that one, of course, which is one reason that new traders always hear of it!) This trading maxim appears to make wonderful sense, but only when viewed in the context of a recent trade with a specific outcome. When you have entered a trade at a good price, watched it go your way for a while, then watched it go against you and turn into a loss, the maxim sounds like a pronouncement of divine wisdom. What you are really saying, however, is that in the context of the last trade, "I should have sold when I had a small profit."

Now let's see what happens on the next trade. You enter a trade, and after just a few days of watching it go your way, you sell out, only to stare in amazement as it continues to go in the direction you had expected, racking up paper gains of several hundred percent. You ask a more experienced trader what your error was, and he advises you sagely while peering over his glasses, "Remember this forever: Cut losses short; let profits run." So you reach for your list of trading rules and write this maxim, which means only, of course, "I should NOT have sold when I had a small profit."

So trading rules #2 and #14 are in direct conflict. Is this an isolated incident? What about rule #3, which reads, "Stay cool; never let emotions rule your trading," and #8, which reads, "If a trade is obviously going against you, get out of the way before it turns into a disaster." Stripped of their fancy attire, #3 says, "Don't panic during trading," and #8 says, "Go ahead and panic!" Such formulations are, in the final analysis, utterly useless.

What I finally desired to create was a description not of each of the trees, but of the forest. After several years of trading, I came up with -- guess what -- another list! But this is not a list of "trading rules"; it's a list of requirements for successful trading. Most worthwhile truths are simple, and this list contains only five items. (In fact, the last two are actually subsets of the first two.) Whether this list is true or complete is arguable, but in forcing myself to express my conclusions, it has helped me understand the true dimensions of the problem, and thus provided a better way of solving it. Like most rewards life offers, market profits are not as easy to come by as the novice believes. Making money in the market requires a good deal of education, like any craft or business. If you've got the time, the drive, and the right psychological makeup, you can enter that elite realm of the truly professional, or at least successful, trader or investor. Here's what you need:

*1. A method*.
 I mean an objectively definable method. One that is thought out in its entirety to the extent that if someone asks you how you make your decisions, you can explain it to him, and if he asks you again in six months, he will receive the same answer. This is not to say that a method cannot be altered or improved; it must, however, be developed as a totality before it is implemented. A prerequisite for obtaining a method is acceptance of the fact that perfection is not achievable. People who demand it are wasting their time searching for the Holy Grail, and they will never get beyond this first step of obtaining a method. I chose to use, for my decision making, an approach which was explained in our book, Elliott Wave Principle. I think the Wave Principle is the best way to understand the framework of a market and where prices are within that framework. There are a hundred other methods which will work if successful trading is your only goal. As I have often said, a simple 10-day moving average of the daily advancedecline net, probably the first indicator a stock market technician learns, can be used as a trading tool, if objectively defined rules are created for its use. The bad news is that as difficult and time consuming as this first major requirement can be, it is the easiest one to fulfill.

*2. The discipline to follow your method.*
 This requirement is so widely understood by the true professionals that among them, it almost sounds like a cliche ´ . Neverthless, it is such an important cliche ´ that it cannot be sidestepped, ignored, or excepted. Without discipline, you really have no method in the first place. It struck me one day that among a handful of consistently successful professional options and futures traders of my acquaintance, three of them are former Marines. In fact, the only advisor, as ranked by Commodity Traders Consumer Report, consistently to beat my Telephone Hotline record from 1983 to 1985 was a former Marine as well (he has retired from the advisory business). Now, this is a ratio way out of proportion to former Marines as a percentage of the general population! Why should this anomaly exist? Think about it. At some point in their lives, these people volunteered to serve in an organization which requires, above all, discipline. These are people who asked for the opportunity to go charging through a jungle pointing a bayonet and pitching grenades, surviving on roots and bugs when necessary. Thats an overdramatization perhaps, but you get the point. These people knew they were "tough," and wanted the chance to prove it. Being "tough" in this context means having the ability to suppress a host of emotions in order to act in a manner which would strike fear in the hearts of most people. I was never a Marine, but years ago while attending summer school with Georgia's "Governors Honors Program," I was given a psychological test and told that one of my skewed traits was "tough-mindedness" (as opposed to "tender-mindedness"). I didn't exactly know what that meant, but after trading and forecasting the markets for fourteen years, it is clear that without that trait, I would have been forced long ago to elect another profession. The pressures are enormous, and they get to everyone, including me. If you are not disciplined, forget the markets.

*3. Experience.*
 Some people advocate "paper trading" as a learning tool. Paper trading is useful for the testing of methodology, but it is of no value in learning about trading. In fact, it can be detrimental, by imbuing the novice with a false sense of security in "knowing" that he has successfully paper traded the past six months, thus believing that the next six months with real money will be no different. In fact, nothing could be further from the truth. Why? Because the markets are not merely an intellectual exercise. They are an emotional (and in extreme cases, even physical) one as well. If you buy a computer baseball game and become a hitting expert with the joystick while sitting quietly alone on the floor of your living room, you may conclude that you are one talented baseball player. Now let the Mean Green Giant reach in, pick you up, and place you in the batter's box at the bottom of the ninth inning in the final game of the World Series with your team behind by one run, the third base coach flashing signals one after another, a fastball heading toward your face at 90 m.p.h., and sixty beer soaked fans in the front row screaming, "Yer a bum! Yer a bum!" Guess what? You feel different! To put it mildly, you will find it impossible to approach your task with the same cool detachment you displayed in your living room. This new situation is real, it matters, it is physical, it is dangerous, other people are watching, and you are being bombarded with stimuli. This is what your life is like when you are actually speculating. You know it is real, you know it matters, you must physically pick up the phone and speak to place orders, you perform under the scrutiny of your broker or clients, your spouse and business acquaintances, and you must operate while thousands of conflicting messages are thrown at you from the financial media, the brokerage industry, analysts, and the market itself. In short, you must conquer a host of problems, most of them related to your own inner strength in battling powerful human emotions, in order to trade real money successfully. The School of Hard Knocks is the only school that will teach it to you, and the tuition is expensive.

There is only one shortcut to obtaining experience, and that is to find a mentor. Locate someone who has proved himself over the years to be a successful trader or investor, and go visit him. You will undoubtedly find that he is very friendly since his runaway ego of yesteryear, which undoubtedly got him involved in the markets in the first place, has long since been humbled, matured by the experience of trading. Watch this person operate. Observe not only what he does, but far more important, what he does not allow himself to do. This person does exist, but it is hard to find him. He will usually welcome the opportunity to tell you what he knows.

*4. The Mental Fortitude to Accept the Fact that Losses Are Part of the Game.*
 There are many denials of reality which automatically disqualify millions of people from joining the ranks of successful speculators. For instance, to moan that "pools," "manipulators," "insiders," "they," "the big boys" or "program trading" are to blame for one's losses is a common fault. Anyone who utters such a conviction is doomed before he starts. But my observation, after eleven years "in the business," is that the biggest obstacle to successful speculation is the failure merely even to recognize and accept the simple fact that losses are part of the game, and that they must be accommodated. The perfect trading system does not exist. Expecting, or even hoping for, perfection is a guarantee of failure. Speculation is akin to batting in baseball. A player hitting .300 is good. A player hitting .400 is great. But even the great player fails to hit 60% of the time! He even strikes out often. But he still earns six figures a year, because although not perfect, he has approached the best that can be achieved. You don't have to be perfect to win in the markets, either; you "merely" have to be better than almost everybody else, and that's hard enough. Practically speaking, you must include an objective money management system when formulating your trading method in the first place. There are many ways to do it. Some methods use stops. If stops are impractical (such as with options), you may decide to risk only small amounts of total capital at a time. After all is said and done, learning to handle losses will be your greatest triumph.

The last on my list is one I have never heard mentioned before.

*5. The Mental Fortitude to Accept Huge Gains.*
 This comment usually gets a hearty laugh, which merely goes to show how little most people have determined it actually to be a problem. But consider. How many times has the following sequence of events occurred? For a full year, you trade futures contracts, making $1000 here, losing $1500 there, making $3000 here and losing $2000 there. Once again, you enter a trade because your method told you to do so. Within a week, you're up $4000. Your friend/ partner/acquaintance/broker/advisor calls you and, looking out only for your welfare, tells you to take your profit. You have guts, though, and you wait. The following week, your position is up $8000, the best gain you have ever experienced. "Get out!" says your friend. You sweat, still hoping for further gains. The next Monday, your contract opens limit against you. Your friend calls and says," I told you so. You got greedy. But hey, yo'ure still way up on the trade. Get out tomorrow." The next day, on the opening, you exit the trade, taking a $5000 profit. It's your biggest profit of the year, and you click your heels, smiling gratefully, proud of yourself. Then, day after day for the next six months, you watch the market continue to go in the direction of your original trade. You try to find another entry point and continue to miss. At the end of six months, your method finally, quietly, calmly says "Get out." You check the figures and realize that your initial entry, if held, would have netted $450,000.

So what was your problem? Simply that you had allowed yourself unconsciously to define your "normal" range of profit and loss. When the big trade finally came along, you lacked the self esteem to take all it promised. You looked at a job requiring the services of a Paul Bunyan and decided that you were just a Pee Wee Herman. Who were you to shoot for such huge gains? Why should you deserve more than your best trade of the year? You then abandoned both method and discipline.

To win the game, make sure that you understand why you're in it. The big moves in markets only come once or twice a year. Those are the ones which will pay you for all the work, fear, sweat and aggravation of the previous eleven months or even eleven years. Don't miss them for reasons other than those required by your objectively defined method.

The I.R.S. categorizes capital gains as "unearned income." That's baloney. It's hard to make money in the market. Every dime you make, you richly deserve. Don't ever forget that. I wish you success.


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## rimtas (31 December 2014)

Xao advanced in five waves from wave ((ii))(circled) bottom, which confirms uptrend. 

Short term, the smaller wave (ii) correction is in progress. 
I spotted that this short term decline is taking the same shape as previous wave iv of an Impulse, most likely forming a Quasi Fractal. And at least a start of wave c is very similar to previous wave C(circled) within wave iv(of (i), thus I suspect that market will sport a nice Copy Fractal marking the entire decline complete. Using Fib levels and multiplying wave iv by 1,618 the bottom could be at ~5352.

I usually do not analyse 5 min time frames, unless I want to daytrade, so this is basically for fun or just to show how to spot developing Fractals which might make anyone to be prepared for a reversal.  When Fractals fail to move in the same direction after they are formed(up), market usually produces a violent move to the downside.

Happy New Year to Everyone and I wish a prosperous 2015!


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## rimtas (6 January 2015)

Today's close could mark the end of wave (ii) as it corrected in three waves, reaching fib 38,2 level.  Usually second waves make a deeper retracement of at least 50%-61,8%, so if the rally won't start from here, I will be looking for a more prolonged  decline in the week to come.
 A rise above 5450 will confirm that wave (iii) is underway.


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## rimtas (8 January 2015)

I know it is the XAO thread, but today I throw in a few charts of "Hot" commodity-OIL.
 Today I've read an article which declares that 70% of British oil producers are operating at a loss and they all face bankruptcy soon, sending the shock waves through world markets.

When I hear the word "bankruptcy", I always smell opportunity.  I decided to look closer what is going on with this hottest commodity on the planet, which is diving since June 2014 and making headlines around the world. 

The pessimistic consensus is clear-I couldn't find any articles about how oil is going to rebound soon, there are predictions to $40,$30 and even to $20. And after these targets where met, oil is going to stay there(according to analysts, because of growing stockpiles and OPEC no willingness to cut production. Other reasons are even more bizarre-like Arabs wanting to get rid of high cost producers; or Rockefellers decided that they want to clean up the markets from bubbles  ) 

EW tells me a different story- from it's orthodox Top of $115 in June 2014, Brent (I take Brent for better waves than WTI) have sported five waves down, with final subdivisions left. The clear Intermediate fourth wave Triangle warns that the most recent decline is Terminal.  Prices are declining in a "panic mode", because even Log Scale can't fit them into the Channel. 
 But panic here is just a mirage, because Intermediate Wave (1) was the longest one, (3) was shorter, and I expect that (5) will end no lower that $32, making Intermediate Wave (5) even shorter than (3). This kind of development with shorter and shorter waves tells that the Trend is tired and the reversal will be sharp and scary. 






Shorter subdivisions requires just wave 4 and 5 to complete Wave (5).  I do not try to speculate where it could end, as I want to see a complete subdivisions of these waves . But 2008/2009 bottom support is at 36.39. Other targets by FIB relationships could be 41 and 45.   Final wave could also be extended as commodities tend to sport terminal waves in a capitulation mode.   
I would say that it is the right time to look for distressed energy stocks. And if someone is thinking that rise in oil is bullish for markets, then any stocks are a buy(though I don't think this relationship is true).


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## dutchie (8 January 2015)

rimtas said:


> I know it is the XAO thread, but today I throw in a few charts of "Hot" commodity-OIL.
> Today I've read an article which declares that 70% of British oil producers are operating at a loss and they all face bankruptcy soon, sending the shock waves through world markets.....




Excellent post rimtas. Thanks for your analysis.


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## rimtas (13 January 2015)

Most recent wave structure allows me to forecast that the next phase of advance could start from current levels.  Market needs to reach and break 5450 in order to be more confident that the strongest part of wave sequence is underway.
 Minute wave (iii) should carry prices towards 5860, where it would be 1,618 times of wave (i), if it begins from these levels.
 I am not discarding the scenario where wave (ii) would be more prolonged and complex, as per Alternate line on a chart, but the latest market action just keeps going in "fives" and correcting in "threes" at higher levels every week, suggesting that the breakout to the upside could take everyone by surprise.  

In the meantime, the small minuette wave ii can move down a couple of days more, but this scenario is necessary for it to end now, as current structure on a smaller time frames looks pretty good.

Wave (iii) has a characteristics of a continuous "gap and go" movements, so one can recognize it when it starts. Banks are in line with XAO wave structure, WES is looking good as well, TLS is in full swing in a third wave.  I must also note that AUD most likely is looking for some sort of a bottom, and I noticed that markets are happier when AUD is not falling. Oil is sporting last subdivisions as well, so everything more or less is aligned for a rally to start soon.


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## rimtas (20 January 2015)

I think a Bottom in OIL has been set, Market declined in clear 5 waves from Triangle, and met minimum target requirements. The consensus of opinionsin OIL  is so bearish, that the countertrend Rally is imminent soon. 

At the smaller Time frames OIL already advanced in five, which should be a signal for all those bears. 

Longer term I expect OIL to Bottom somewhere below 10/barrel, but at this stage the first Primary Wave down is complete or almost complete and 2015 should be a consolidation/rally period with Primary wave ((2)) up.

Few days Later I will post more extensive analysis and more charts on this Topic.


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## Paavfc (21 January 2015)

Oil struggling #oversupply


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## rimtas (23 January 2015)

Lately Oil has been making headlines everywhere. Many pundits have rushed to explain retrospectively the stunning decline in its price. But the wave structure in June 2008 warned all Elliott minded technicians about the Major Top in oil and came out six years ahead of these explanations.  You can also check my last comment on commodities when it came out just ahead of the onset of the latest plunge:  https://www.aussiestockforums.com/forums/showthread.php?t=6487&p=840616&viewfull=1#post840616

  At those times, no one was talking as they are today. On the contrary, back then (see chart) 91%  of traders were bullish on oil, and Large Speculators (or so called Smart Money)  had their biggest net-long position _ever._

The long term wave structure from the Major Top in 2008 predicts that prices for oil will ultimately plunge to new lows below those of early 2009. In oil, that low was $34.
Aside from financial reasons, economics would also facilitate a future lower price for energy. The reason is simple: high prices create incentives to increase supply.  But you never hear economists say this when commodity prices are topping.  At those times, the vast majority of them concoct fundamental explanations for why the trend will continue.
In major ABC Corrections bearish fundamentals usually start falling into place during C waves. And, sure enough, after six years after all-time high in the price of oil and of more than 60% of just recent crash into wave C, it has become obvious to analysts that the world is awash with oil. Talk of "glut” and “oversupply" is everywhere. The US, formerly highly dependent on other nation’s oil production, now produces more oil than any other country.
So, experts say they can now see the _reason_ why oil has fallen-they say supply made prices fall.  But this formulation is incorrect-rather, high prices prompted more supply. Lower prices will have consequences as well, but this doesn’t mean they will create more demand.




The supposed _causes_ that economists are now citing have come into light well _after_ oil topped in 2008 at $147.2/barrel. Recall that in 2008, oil crashed 78% in wave *a*, and no one knew why. That's because "fundamental" events lag waves, so there were no fundamental causes in sight. There was no glut, no oversupply. Today, the Saudi Prince says that the reasons for oil's fall are now so clear they're "a no-brainer". But the reasons given today are all lagging results, not causes, of the path of oil prices. That's why they showed up half a decade after the top.

The media are suddenly full of headlines and quotes from economists saying: "There is no bottom in sight for oil", "more downside to come", even Saudi's said they will be ok if crude will fall to $20.  These predictions are way too late to do any good. With the Daily Sentiment Index ( from trade-futures.com) as low as 3% bulls in recent days, the easy money on the short side has been made. In fact, now that bearish convictions has crystalized, oil is more likely to rally from current levels. The near term wave structure suggests that the small "five" from the bottom can be the start of a major correction up.






Looking at the long term structure, oil has much more to go. At the bottom of wave *c*, oil will sell for $10/barrel or less. The chart shows why. The corrections usually retrace the entire fifth wave advance (or more), and in this case the extreme of Cycle wave IV is at $10. And this is not a new prediction. Elliot wave community saw this chart back in 2007-2008 when oil was above $100 and topping in Cycle wave V .
I am quite confident that in the next decade or so I can repost the same chart where Wave* c* will be in it's later stages.







Going back to All Ords, the Index finally broke out from the smaller wave (ii) area, confirming uptrend is underway.  Looking at the Daily chart, it has much more to go, finally breaking last year's high in the months to come. Wave ((iii)) should be a funny ride. 







One of the best wave structures have banks, and Westpac in particular(which shares I own). The price action has a character of a third wave, which is a surprise wave and produces "Gap and Go" movements. I expect it to carry at least to $36 until the next major correction sets in.


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## Logique (24 January 2015)

rimtas said:


> Most recent wave structure allows me to forecast that the next phase of advance could start from current levels.  Market *needs to reach and break 5450* in order to be more confident that the strongest part of wave sequence is underway.
> Minute wave (iii) *should carry prices towards 5860*, where it would be 1,618 times of wave (i), if it begins from these levels.
> I am not discarding the scenario where wave (ii) would be more prolonged and complex, as per Alternate line on a chart....



XAO at 5468 Rimtas, so your 5860 appears to be the upside target. But your lower Alternate line isn't out of the question either. 

Another thing, the Oct and Dec 2014 XAO shape could be seen as a double-bottom, also indicating ~5,850 as the upside target 

In your oil posts, I think your LT $10 barrels of oil would cause quite the consternation on world markets. Whereas your ST reversal will I expect be warmly greeted.

Anyway, liking your work on these charts, keep it up.


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## Smurf1976 (24 January 2015)

Oil at $10 implies some interesting things from a fundamental perspective.

I'm not saying it will or won't happen, I'm no expert on these charts but I do respect the skill involved in producing them, just noting that $10 oil and "business as usual" don't seem overly compatible to me in a fundamental sense. $10 is below the marginal operating cost of at least some oil fields, making shutting in of production the rational response, and the coal and gas price would also need to slump in order to avoid a fuel switching driven spike in oil consumption. Put together, that implies a fall in consumption and/or some temporary shock driven by pure financial market activities not related to anything physical. If the latter then that's very unsustainable physically - can't burn more than is produced for long.

Interesting.


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## rimtas (24 January 2015)

Hi Smurf, 
Don't get too much exited about $10 oil price _now_. It is a long term target, most likely materializing in ne early 2020's, I'll bet on 2022-2023(there is some good analysis on this time frame).

So trying to forecast what kind of fundamentals would be and what "shock" would markets experience on this event is useless right now.   It is better to focus now on the rebound in oil, as it will generate a lot of optimism, and I am pretty sure that when oil will be toping in a corrective Primary wave ((2)), everyone will be laughing at you if you mention $10 oil.




Logique said:


> XAO at 5468 Rimtas, so your 5860 appears to be the upside target. But your lower Alternate line isn't out of the question either.




I just noticed that many blue chip stocks just made their breakouts above their respective first wave tops(like WBC), so I think alternate scenario is less likely at this stage. There could be a few more series of first and second waves at lesser degrees, but basically the best moment to enter is in the past.


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## rimtas (2 February 2015)

All Ords is approaching an ascending resistance  which is at 5630-5660 depending on time it takes to reach it.  Aug 2014 top is also at the same area. With almost complete internal subdivisions of wave i (of (iii)), this resistance could provide a pulback-a good spot to join the trend.  

The break higher above this level confirms that market is approaching a Point of Recognition area-the strongest part of wave (iii). I expect a breathtaking movements here, which should shake the beliefs of even most prominent bears.








As expected, oil rallied from the botom of Primary wave ((1)), catching all linear thinkers  by surprise. That's what usually happens when market lacks sellers(because everyone already sold), and everybody is on the same boat. 

 I don't know for how long and how far  wave ((2)) can go, but the first strugle could be at previous triangle apex(see chart).







BHP sported five waves from the bottom, confirming uptrend (see small 15 min chart within). After some sort of pullback, I exect it to move higher, towards descending uper channel. 
Intermediate term suggests that one more low of wave C is possible before major multiyear rally begins, but overal this stock is more bullish than bearish.


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## PinguPingu (3 February 2015)

And the base keeps running, running and running, running...


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## rimtas (5 February 2015)

Nice breakout through Aug 2014 top, leaving bear market counts dead.  I'll post some analysis on weekend where this wave could end, as well about some other stocks.

 As for now, third wave is in progress, and better not to do some stupid action like sell and try to pick up cheaper.  Third waves can go beyond anything one can expect. All my stocks are deep in the green (WBC and BOQ the biggest winners), just WES is a bit slow, but ultimately it should catch on too.


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## rimtas (7 February 2015)

I won't be looking at a short term subdivisions today, but rather we must take a look at the weekly chart.  But first some news from RBA. 

RESERVE BANK CUTS GROWTH AND INFLATION FORECASTS. 
This headline appeared just yesterday, for RBA officials to justify why they cut the cash rate to 2.25%.
They say that "There has been little growth in non-mining business investment over recent years and recent data suggest that it will remain subdued for a time."  But it is basically the same as saying “ there were raining in the past two weeks, and raining today, so based on this we project a rainy days further ahead.”
But that’s not all. RBA also said, that "Growth overall is now forecast to remain at a below trend pace somewhat longer than had _earlier been expected_."

And looking at the market from 2012 it(RBA comments) does make sense- market was rising, and then “unexpectedly” we had a year long sideways correction, which shifted optimistic sentiment as good as the swift decline. And at the end of this correction, RBA turned pessimistic, slashing economy’s growth forecasts and predicting rising unemployment to 7% in a year to come.  

But all of this won’t happen. With market in early stages of Intermediate Wave (3), sentiment just shifted from negative to positive. It takes time for economy to respond, as fundamentals lag market usually few years, but from here things start to improve.  But real good numbers will usually appear only when wave (3) is near the Top, so do not expect that there will be major “good news” as a buy signals. Third waves keeps the majority of people out of the market and runs _on empty_, not with everyone on board. 

Trying to forecast where wave (3) could end, I can apply simple guideline-it should be 1,618 times of Wave (1), this puts a Target of  All Ords at 7944. And because third waves have a character of a swift advance, it should last shorter than Wave (1), which lasted 3,5 years. So maybe 2-2,5 years, but this is highly speculative as it is hard to forecast time frames because of the nature of the EW patterns which in reality do not have neither price, nor time axis, just a form.
The 2007 Top is 6870, and this number remarkably marks the length of Wave (1) itself, so expect some sort of resistance here on the way.
On the bottom of a chart you can see the RSI index just generated a Buy Signal on a weekly time frame, adding one more technical evidence into the bigger picture.







TLS is the leader and is rising in Primary Wave ((3)) with momentum at this stage being very strong, indicating that price is somewhere at the middle of the wave.  Year long Target for Wave ((3)) is at $9.40, where it will be 1,618 times of Wave ((1))(circled). The y1999 Top was at $9.20, so this wave is definitely targeting to breach it, showing that new trend has been set.
Short term  I expect some sideways movement lasting 4-5 weeks in a $6.5-7.0 range and the breakout higher thereafter, leaving those prices behind. This would be a god spot to join the trend or ad to a position for those who missed the strongest part.  
At this stage of the trend prices usually remains in a thin channel, so any break out lower from it will rise an alarm for current labelling.





One more stock that is resisting overall market trend is WOW. In the WOW thread you can find my short term forecasts, but the bottom line is that WOW is looking for Primary Wave ((2)) bottom, and it should come soon, most likely in the first quarter, if it is not bottomed already.
  Applying a simple  trendline technique, we can see that there is a strong resistance at $28-29 area, if the WOW decides to sport a last wave down.  But breaching $33,15 will force to reconsider the chances that WOW has made it‘s ultimate bottom at$ 29,12 and Primary Wave ((3)) has started, which should carry prices well above mid 2014 top of $39.








If my forecast turn out to be right, 2015 should be extremely good year for stocks.  You can read more about why the market should advance in Wave (3) in my earlier post, when Wave (2) just bottomed, here : https://www.aussiestockforums.com/forums/showthread.php?t=15355&p=847352&viewfull=1#post847352

Cheers


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## Logique (7 February 2015)

Great work again Rimtas.

It's been amazing to see the All Ords outperform the Dow by percentage over the last couple of weeks.


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## skcots (7 February 2015)

Yes, thanks Rimtas. Theory is one thing but seeing it applied is very educational.

And thanks Logique.


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## Boggo (8 February 2015)

rimtas said:


> As for now, third wave is in progress, and better not to do some stupid action like sell and try to pick up cheaper.  Third waves can go beyond anything one can expect.




In theory there could be a 200+ point correction somewhere between now and 6100 if this abides by the rules.

(click to expand)


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## pavilion103 (9 February 2015)

Boggo said:


> In theory there could be a 200+ point correction somewhere between now and 6100 if this abides by the rules.
> 
> (click to expand)




My thoughts too


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## rimtas (9 February 2015)

Yes, there could be a correction, as wave (iv) of ((iii)). Good spot to add those shares which were missed to pick up near the bottom.
Today I wanted to post some interesting chart of Iron Ore, but in the context of Motley Fool pro Joe Magyer, who claims himself a Chief Investment Advisor. Recently he made a comment : _"The Future of Iron Ore (hint: it's not looking promising)"_. And later he explains fundamental reasons why its' not looking promising,  article here : http://us3.campaign-archive1.com/?u=0d1d0582254b8399936e6130e&id=bc10475889&e=7116026ec2

As an elliott minded investor, I put this comment on a chart-in two places-now, and near the Top in 2011, when Iron ore was trading at  nearly $200. What do you think which timing would be more appropriate for this comment to come out? Which would have made more money and was more important as a warning? 
Answer is obvious, right?





That's what happens, when anyone is trying to predict _future_ market prices using _current_ fundamental/economical situation as a _reason_.

 China is not looking good right now, and why? Because it _was_ in a bear market for five years. After the bottom has been set,  economy usually collapses as a consequence of the  bear market that is a history already. And for this same reason many people are missing bottoms, because there are simply nothing good around at the time, no good news, no good fundamentals, everything is black-no reason to buy anything. 
And most of the people are using fundamental reasoning as a _cause_ for future market direction. That's why majority of them are missing trends, ending buying near the tops and selling near bottoms, and almost never make money.
I have nothing against Motley Fool, I am reading many articles, but just for one reason-to grasp a crowd sentiment at the particular point in the wave structure.  And Iron Ore definitely looks more promising now than in 2011.


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## rimtas (10 February 2015)

Sometimes market tends to sport a textbook patterns, so I draw a few lines how it would look if WBC is about to make one. Usually textbook patterns make about 20% of the market, so forecasting them is tough and one always need to be in a mode of expecting something unexpected.  So this is just for fun. A few months later we will see how it will look in reality

Short term WBC is really strong, but if I counted waves correctly, it is at the wave (iv) now and a small wave (v) to new highs is underway.
 2,618 level of wave ((i)) is at ~$38,40, so I expect WBC to top here in a ((iii))(circled) wave. 
After this happens there would be no any prolonged "gap and go" movements for months, unless down. All Ords should have some sort of similar structure; just waiting for a big correction in Intermediate wave (3) is a bit wrong.


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## rimtas (12 February 2015)

It is possible to say that All Ords have toped in wave (iii) at 5803, just shy 40 points of my 5840 target.  I expect a coming correction will carry prices to at least 38,2% retracement of recent rise, bottoming in a 5590 area. 

As wave v of (iii) was an extended wave, correction usually tries to reach a second wave (of v), which remarkably lies directly at fib 38,2 level.  Using channelling technique  it is possible to anticipate a time factor as well, and this will put the market into another week or so of not rising prices.  

The top alternate(in blue)  is a more deeper slide to 61,8%(towards 5450) in wave ii, breaking a channel and keeping sentiments very low.  In this case the most funny part would be later. 

But the bottom line is that market should sport some sort of a stair-step advance towards significantly higher levels  in the months to come.


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## PennD (13 February 2015)

You called this a ramp month or so ago rimtas... Great call, thanks for posting!!!


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## rimtas (13 February 2015)

Hi Penn, I anticipated  this wave from the mid of last year... But unfortunately I am not riding it in full, just a bit less than half of the portfolio is still in cash. At this stage I think it is too late to buy anything, need to wait a few months until the full wave cycle plays out and only then step in with remaining cash. 

 Good entry opportunities are only two-three times(or less) per year so patience is the key here if you want to ride the entire Intermediate (3) which I think will take 2 or more years to complete.  And market is just at the initial stage of advance, breaking itself from the ice that kept it below the surface for the entire year. So there will be many opportunities along the way. 


In the short term, so much of the correction. It was short both in time and in price(for wave (iv) discussed above), so I am not sure how to interpret it.  But one thing is clear-market is in wave (iii), momentum is strong, and better to sit still. Some stocks (like WBC and NAB) have quite good structures, so guidance where the market is located can be drawn from their charts.  Before a turn, it will slow down. 

It is quite interesting to read analysts and other market observers(and traders) thoughts and opinions about how stocks are already valued in line with their fundamentals.  It is a classic sign of "disbelief" and ignorance which accompanies third waves-there are simply no any buy signals using  fundamentals.
 They say that Market is at it's face value, unemployment s rising  so there is no room for more advance, because companies need to grow their profits in order for stocks to rise. But this is not true. People maybe have a logical reason, but they're still in control of their emotions.  And emotions are controlled by limbic system, which has a direct link to market action. It does not need any reason to make anyone press a Buy button-it is enough that everybody around is buying. 
 Disbelief, ignorance, bad fundamentals, tense geopolitical situation, -these are the fuel for market advance. If you are afraid, be long.
Cheers


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## Sean K (13 February 2015)

rimtas, our previous EW'ers failed dramatically. Only ever correct in select retrospect. Love your work.


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## rimtas (15 February 2015)

Hi Kennas,

EW is simple, but only when you have an artistic mind which can spot something majority can't; and the scientific approach, that can fit those patterns into larger perspective. So Art and Science comes together here.

 Technically EW is not much better than any other TA, because at the any given moment all rules and guidelines could be successfully applied to forecast both directions. That's why internet is full of Elliott technicians with plenty of different counts.  But very little of them understand how their counts are connected with economy, and social action. 

I believe that humans _en masse_ act unconsciously, and their behaviour is patterned. Social sciences explaining and observing this are at the dawn and many years will pass until theory turns into real thing. But some universities in US are already accepting this idea and you can find socionomics and EW in their curriculums.

So practically applying EW to make money one must rely on the little data their have and even less examples of what social action means, what kind of wave it represents. Give me 1000 or 10.000 years of market data and I can tell with great confidence where the current market and economy is located and forecasting next 100 years with great accuracy would be a piece of cake.

But now when we have 100-200 years of data only, this peace of information is highly speculative, it can represent any wave sequence and next wave could always be the last.  So even EW at this point can not tell what the future holds, and I personally try not to forecast more than 5-10 years ahead. I put my money only on high confidence patterns that I understand  and which fit into given social atmosphere.  One more example can be given right away: last Friday there were news with headline: 
_Economy lacking animal spirits_

https://au.news.yahoo.com/a/26287614/economy-lacking-animal-spirits-rba/

RBA was close, but it missed one great thing-animal spirits are already roaring through the whole country month or so(as well as through Asia region), and this is recorded by stock prices. Current social action will result in improved economic figures later, because social mood is improving. So RBA will get it's numbers later in the year, where it can say that "oh, finally animal spirits started to pick up". But truth is that they picked up month ago. 

This statement comes to light exactly at the moment when animal spirits bottomed in wave (2) and the strongest part of the sequence started. At the dawn of the rise everybody is crying how bad things are, because not rising market makes social mood go down, and at the end they just explode. 

I also liked the RBA phrase that animal spirits "are unforecastable". But if you can forecast economy, why you can't forecast the reasons of economic improvement? In the end, economy is just the lagging factor of social actions, driven by herding behaviour. 

I can go on, but hardly it has any use here, people in this kind of forums are looking for information that could help them to back up their opinions about market direction...which for most of them are moving in linear fashion and driven by news or government actions. I believe this is the reason why most of them loose money-because they use information, which  already is a _result_ of a previously dominated trend.   

Cheers


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## tech/a (15 February 2015)

kennas said:


> rimtas, our previous EW'ers failed dramatically. Only ever correct in select retrospect. Love your work.




Kennas
You've never been able to get your head around the dynamic nature
Of Elliott Wave,
One of the biggest advantages of the analysis.

Some of us do.

Is there any " work " of yours you'd like to share
Or is this the best you've got!


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## rimtas (17 February 2015)

Waves in oil doesn't look like textbook pattern, but previous Triangle Apex was reached and count can be seen as "five" from the bottom, indicating uptrend. I am looking forward for a pullback and then next phase of advance towards significantly higher levels. So much of the glut and oversupply. In the heads only, as always.


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## Sean K (17 February 2015)

rimtas said:


> Hi Kennas,
> 
> EW is simple, but only when you have an artistic mind which can spot something majority can't; and the scientific approach, that can fit those patterns into larger perspective. So Art and Science comes together here.
> 
> ...



Thanks for the generous feedback rimtas. Always in good spirit.


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## Logique (19 February 2015)

The All Ords seems to be struggling to push through this level ~ 5870 or so. 

Vulnerable to a retrace I'd have thought, especially if OS markets pull back.


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## rimtas (20 February 2015)

I try to understand market location but waves on XAO are not textbook, so sometimes it is better to look at it's constituents. Banks have the best structures at the moment with WBC, NAB leading the way. 
 NAB has a nice Ending Diagonal as a small wave (v) and from this I can expect that the strongest part of the move from mid January is over. Now it should experience some "struggle", as I call it, and finally pushing to new highs in last wave, ending the entire five wave pattern. 

XAO may have some similar movement, maybe with different structure, but  indications are that market is slowing down. There will be some more waves higher until it reverses into higher degree multiweek correction. Hopefully I will be able to point  to a probable top if there is enough evidence for it. As for now, trend is up, there is no reason for exit.


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## rimtas (23 February 2015)

BHP is either bottomed or one more wave is still missing.  The long term bullish trendline (which I covered in my previous posts about BHP) remains a strong resistance. Even when price did break it down, this didn't last long- market made a violent move to the upside rushing back into channel, this behaviour is bullish. 

One more evidence of the bottom is that traders shifted their view from the Iron Ore correlation and this no longer is the reason to sell the stock lower.  Iron Ore most likely is also somewhere very close to the bottom, so rally is inevitable. 

Because BHP rallied from the bottom in 7 waves, (or just A-B-C) I still consider a one more last possibility for it to make one more lower low just below $26,5, but BHP is the stock where waves in shorter time frames are not perfect, so this move could be an Impulsive advance from the actual bottom.

 If it rallies above last week's top of 32,97, consider no more new lows, and instead a multimonth/multiyear advance towards $50 in three waves, completing one more wave of the larger Triangle that I discussed earlier.


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## rimtas (28 February 2015)

Not much to add short term, market is advancing higher and higher, probably will gap up o Monday in this strong bull wave.  So a bit of weekend reading looking at long term perspective.

Australian social critic Donald Horne coined the phrase "the lucky country" when he published his seminal analysis of Australia, _The Lucky Country_, in 1964. The book came out during an economic boom toward the end of a nearly 40 year long bull market, and this title fit the mood of the times.

Although Horne used the world "lucky" somewhat negatively, the phrase has been popularly interpreted to mean that Australia is blessed with many advantages, including abundant natural resources, good weather and some separation from global problems.

Nearly 50 years later, I can add another reason for Australians to count their blessings: a history of relatively short and shallow bear markets in stocks.

According to the oldest Australian equity index I know of, which begins in 1875, bear markets in Australia have lasted no longer than five years. In addition, only one resulted in declines of more than 50%-the 55% decline during the 1970-74 bear market (monthly closing basis). Even following the 1929 crash, Australian stocks fell only 46%, bottomed in 1931-a year ahead of other global markets-and recovered to new all-time highs just five years after the 1929 top.

Australian stocks' long-term trend channel is the oldest proven channel that I am aware of among global stock markets. Time will tell whether stocks will continue to rise within this trend channel, but history tells here that betting on bear is a bad idea. 

Though there is a small probability that in the next 5 years All Ords will test the lower trend channel which runs around 3000 area resulting in bigger than average bear market, totalling ~13 years(from 2007 to 2020), I am not betting on it because of historical performance.  I expect the prices remain above the middle trend channel line in the next decade or more. 

2009 bottom was a suspected Supercycle Wave (IV), thus Wave (V) is underway. This is a big wave, lasting decades, and stocks are cheap right now. Prepare yourself to climb a Wall of Worry. 
And of course, Blue Chips are the best way to ride this wave, because they represent the mood of the market.


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## rimtas (28 February 2015)

A stock that has a complete looking wave subdivisions is Telstra. The decline from 6,74 top consists of three waves, technically appearing as double three(wxy) .
It crashed more than I expected, but after forming a bottom at 6,25 price rushed back into the channel, which is bullish.  Usually this is the price action of wave ((iv)), so I am looking for next wave ((v)) to reach ~7.00 level before the next correction.  I added to my position another 1000 shares, using this decline as an opportunity to spend more cash.


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## JonTaf (2 March 2015)

Hi rimtas,

why do you use sometimes log scale?

thanks


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## rimtas (2 March 2015)

Hi John,

Log scale enables to see price patterns on a very large time frames, where aritmetic is just a flat curve.   So the answer is-log scale helps to visualize charts to the point where mind accepts them as valid.


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## rimtas (2 March 2015)

Short term subdivisions proved that BHP is on the run in an Intermediate Wave (D), which should take the rest of the year and Top in the $45-50 range before the (E) wave crash. I will use any correction as a BUY, I am confident that ~27 bottom will not be breached. With Iron Ore bottoming(for a dead cat bounce), and market overall in a positive wave, BHP should sport another wave for a long term Triangle pattern.


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## rimtas (3 March 2015)

Most likely market is ready for a turn.  It reduced it's speed, right indicator is flashing and the driver started to hold the wheel harder.  Will it change it's mind at the last moment is to be seen, but now I will be looking for a small impulsive decline which will break the wining streak.  As a guide for wave formation I am looking at banks, because XAO has more interpretations here. 

Westpac and NAB both have textbook subdivisions, but the last wave ((v)) would look better if it took more time(and price). So I suspect market can sport an Ending Diagonal and then crash. Or just spike higher above 40 and reverse.  Both ways it should be the last wave and major multimonth correction should develop, killing the positive market sentiment before the next leg of advance. 

But if I am right and market is indeed in Intermediate Wave (3), surprises always comes to the upside, and the risk of not to be able to buy cheaper if sold here is real. So do your bet.


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## rimtas (6 March 2015)

A good indication of the developing bull market can be seen in the MidCap50 index.   6 Years after the bottom and numerous overlapping waves, it looks like it's started to pick up speed.  

The best count that comes to mind here is series of first and second waves from 2011, which implies that current rise is just approaching the middle of the rally in the strongest part of the sequence. If I am right, at the end of the year MidCap50  index should be at least 15-20% higher than today, ultimately reaching new highs above those of 2007 in the years to come.





Constituents of this index have very similar wave structures, with Quantas, Resmed, BOQ, Boral, Seek, Caltex, TTS accelerating in their respective third waves.
 I own BOQ at the moment, but looking to add TTS to my portfolio due to best looking structure, (which means  best forecastable). Though the strongest wave is in the past, but there is at least 25% rising potential before the major multimonth correction starts.


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## rimtas (6 March 2015)

BHP Cut the wining streak, showing that five wave advance from the bottom is complete, confirming that Intermediate Degree Advance is underway. Short term I expect some sort of pullback in three waves, most likely towards ~30, offering another opportunity to enter the market.


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## rimtas (7 March 2015)

Major stocks and XAO made an Impulsive decline from their respective tops, indicating that almost 3 months of advance is over, and market is going to get some breath. For a healty ride corrections are mandatory, because without them optimism builds too quickly and to the dangerous levels, which leads to a crash. 

Stair step advance is what keeps sentiment low, alowing market to climb further .  First level to watch is previous (iv) extreeme at 5704, but 5642 is more likely where it would erase 38,2% of previous wave.  Deeper levels are probable and I will be watching for wave structure to determine the most likely end, but it could take months to develop.  At the end of this correction the talks about recession and alike will increase as declining market makes people more pessimistic about the future.

Alternate is that only wave (iii) toped, and wave (iv) is in progress. In this case 5700 level should be a formidable resistance and (v) wave rally should start from here to new highs. But major banks and minings do not support this case, so probability is higher that larger degree wave has toped.


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## Logique (7 March 2015)

Logique said:


> The All Ords seems to be struggling to push through this level ~ 5870 or so.
> 
> Vulnerable to a retrace I'd have thought, especially if OS markets pull back.



Starting Monday.


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## Boggo (7 March 2015)

Update of XJO chart from one month ago here https://www.aussiestockforums.com/f...=15355&page=19&p=860086&viewfull=1#post860086

If it continues by the rules then W.4 is target area.

(click to expand)


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## rimtas (11 March 2015)

OIL is in the last subdivisions of wave (B), just days from bottoming, presenting a good short term trade if buying  in  $56-53 range. The next leg of advance should carry prices towards ~$70, in five waves. 

https://www.aussiestockforums.com/forums/showthread.php?t=15355&p=861227&viewfull=1#post861227


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## rimtas (11 March 2015)

All Ords today made a small five wave move up from 5723 low, indicating some sort of trend change. 

From the Top index declined in clear three waves, leaving many interpretations, but the main thing to look is that either one more wave(after a bit of pop up) towards 5650 levels would develop, or a rise towards 5900 should start from todays low. 

Both ways the rise in wave (b)  should be just a part of even bigger correction, and ultimately XAO should decline lower in the weeks to come, capitulating in wave (c).


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## Smurf1976 (11 March 2015)

I must say that whilst I don't properly understand the method being used, this analysis is _extremely_ interesting to follow and learn from. Good work rimtas!


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## rimtas (17 March 2015)

As DOW is the world  benchmark of markets direction, I looked at the waves today.  It atracted my attention (again), because I saw the recognizable pattern. There were some attempts to forecast major tops, but as index is at ATH, most bearish scenarios lost ground invalidating thinking that rise from 2009 is a bear wave consisting of "threes". 

At this time trained eye should see that a five wave advance is developing, and because it entered in the second half of the rise, forecasting should become easier. 
I think that Intermediate wave (3), the strongest one, has topped, or is in the topping process(maybe ED?), which could take a few more months.  After this, most likely in the midle of the year, the most bearish correction from 2011 should develop as an Intemediate Wave (4). 

So basicaly the market's strongest advance is over and it will start to slow down at bigger degrees of trend in the years to come.

It is too early to say where it can top out completely, this I'll leave to future discusions when we will have more waves, but some analysis using market cycles indicates that some sort of bottom is due at mid 2016, and one major bottom is predicted to bottom out in y2021-2022. So local and major Tops could be this year and somewhere in the end of this decade.

The conclusion from this is that there shouldn't be any major crashes next year or year after, markets around the world should climb further in a stair-step manner.


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## rimtas (19 March 2015)

Nice rally today at ASX. 
All Ords reached previous highs and it is very important what happens from here. It could colapse straight away in five waves to the last week's low, and only then rally; or it will hit new highs and rally further to 6100 or so. 

I will use a Mid Cap 50 as a guide, which jumped to new highs today.This means that wave (v)(of a third wave) is undeway, that could rise another 3-5% from here before topping out. 
But I can't rule out a posibility of Expanded Flat , with wave c  down coming soon(as per Alternate ), but this should happen tomorrow or next Monday at latest. If not, happy days will continue.

MID CAP 50 also indicates that a TOP at the bigger degree of trend is still months away.

For someone this may look like not much value in trading terms, but for me everything is more or less clear-there is no complete wave structure, which means no SELL.  
 So just patiently waiting, holding everything, getting dividends and looking for fresh opportunities. Just added WOW to my portfolio, half of the initial position because still no confirmation of reversal(need five up to add another half).


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## rimtas (23 March 2015)

It is time for all knife catchers to look at WOW.  A crash from FEB 24th  top of ~34,70 produced 5 waves down hitting 28,52 bottom as expected, reaching an important target area discused earlier (see previous EW discusion in WOW thread). 

Price managed to sport a "five" up from the bottom(as Leading Diagonal), which indicates a trend change.  Now I am looking for a three wave correction down and after this a shoot up should develop.  So it is a good time to load up.  The analysis would be proved wrong if prices are about to decline below 28.50, so little risk here, just about 0,40 cents. ( Idealy executed trade would be with 28,7 entry, leaving just 0,20c risk-buying 1000 shares one could lose only 200 bucks)I like those kind of setups. With market overall trending up, there are little stocks left that could provide a good entry opportunity(I am talking about blue chips only).


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## rimtas (27 March 2015)

WOW rally is more likely a third wave from the bottom, but there is still no time for celebration. 
If the trend is turning, it could be a messy affair- a series of first and second overlapping waves or a simple five from the bottom at larger degree. 
I expect prices to reach an extreme of the previous Triangle of 30.20, but the bottom line is that at this stage we need to wait for the larger Impulsive pattern  to develop.  Probably few weeks should clear this, unless prices crash to new lows from here (below 28,53 ).


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## rimtas (31 March 2015)

I just wondering if DOW could sport an Ending Diagonal as the final wave of Intermediate (3). The prior Wave 3 has ended with ED, and two Diagonals in a row is rare. But there is nothing to suggest that this is impossible. 

The case for Diagonal is on the plate because Dow started to move in "threes" from wave 4 bottom. There is not much variations of what can happen when price is moving not Impulsively(in fives). I will not discuss other scenarios here, as this post is not a forecast, just an observation. I make forecasts only when I clearly see a pattern complete or almost complete. The previous Ending Diagonal took almost 12 months to develop, and because this is the higher degree wave this one could take even longer. So far it is only 6 months in progress, so more to go before it tops out. 

Implications for world markets would be more on the upside for the rest of the year if ED in DOW continues to develop, just the outcome later won't be very nice.


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## gartley (31 March 2015)

rimtas said:


> As DOW is the world  benchmark of markets direction, I looked at the waves today.  It atracted my attention (again), because I saw the recognizable pattern. There were some attempts to forecast major tops, but as index is at ATH, most bearish scenarios lost ground invalidating thinking that rise from 2009 is a bear wave consisting of "threes".
> 
> At this time trained eye should see that a five wave advance is developing, and because it entered in the second half of the rise, forecasting should become easier.
> I think that Intermediate wave (3), the strongest one, has topped, or is in the topping process(maybe ED?), which could take a few more months.  After this, most likely in the midle of the year, the most bearish correction from 2011 should develop as an Intemediate Wave (4).
> ...




You have labelled this as an impulse but are you sure it is? Looking at the bigger picture may suggest the broadening top of the last decade maybe completing. This looks like a big wave 4 expanding triangle. It remains to be seen if this bull can sustain it's run into 2016. Personally I believe we will start a major decline between now and October as major indices world wide are blowing off at present.  Time will tell))


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## Porper (1 April 2015)

gartley said:


> You have labelled this as an impulse but are you sure it is? Looking at the bigger picture may suggest the broadening top of the last decade maybe completing. This looks like a big wave 4 expanding triangle. It remains to be seen if this bull can sustain it's run into 2016. Personally I believe we will start a major decline between now and October as major indices world wide are blowing off at present.  Time will tell))




I can't comment on the posts by Rimtas as he is on ignore but can see his chart in your reply. That count i.m.o. is just wrong as he has impulses labelled as corrections as well as wave (2) taking longer to unfold than the larger degree wave 2 which is a common theme in his interpretation of Elliott Wave. When I have more time I'll post up a chart.


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## rimtas (1 April 2015)

gartley said:


> You have labelled this as an impulse but are you sure it is?




No I am not sure. Because Impulse wave is not complete. I will be sure when I see five waves complete. But at this point it will be too late, right?  
Until then, everyone and everywhere can keep their bearish scenarios alive, because after all, EW magic lies only at the point of reversal, i.e only when pattern is complete.
 And while a bigger five wave advance is developing, you can see bearish patterns along the way, starting from 2010.   It was first Primary wave 2 of ABC, then WXY in 2012, then it morphed into triple ZZ near 2007 top, then a magic thing happened-2007 highs where breached and P2 become Cycle Wave b.  
And everyone were(and still are) pointing to "shocking" fundamentals. But the market keeps on going, it is up to you whether you wait another few years till it sports "a five" ,or just keep on shorting it.


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## rimtas (1 April 2015)

Porper said:


> as wave (2) taking longer to unfold than the larger degree wave 2 which is a common theme in his interpretation of Elliott Wave..




Smaller degree correction can be larger in time and price more often than not.  I am not arguing here with you, I am applying my observations in real time and due to this I am more right than wrong.  The guidelines of wave formations are not written in stone. Good luck waiting for the market to be textbook. 

By the way, Elliott was an observer. You know, even good observers can miss something if they don't have enough data. You better make Wave Principle work for you rather blindly applying few guidelines extracted from 50 years of data. EW is the best approach to the market if you consider 4 main rules. The rest is like changing whether in Melbourne.


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## rimtas (1 April 2015)

If you go this link and then at the bottom of the page there are comments, the first one is most funny. Just take a look at the date, it is written _after_ the last year-end crash...(crashes makes people bearish)

http://www.investing.com/indices/australia-200-futures-advanced-chart

_*sterling intentions Nov 03, 2014 12:57AM GMT *
Certain information has just been released to a select few concerning devastating economic factors in both the US and EU that may not be made public for a while. Estimated release of data is 7 November at 3PM ET, US. We have liquidated ALL long holdings Worldwide on Friday 31 October and are now short 50% hoping for those in control to make an effort to keep markets afloat until Friday, where we will be 100% short, all holdings, all nations. Extremely limited upside potential followed by tremendous downside potential and possible collapse. Greed kills, take profits NOW. When the move comes, you will not be able to get out fast enough. _


This remainds me that some folks want to be cool, but end up as usuall...


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## rimtas (1 April 2015)

Here is one more EW setup. From the mid March bottom TTS has risen in "five"(as LD) and now small wave (ii) is developing. It could go down/sideways a bit more, but the ascending Channel is the ultimate support here as TTS is in the strongest wave sequence.  If Channel is breached down, the expectations needs to be adjusted accordingly. 
I Expect another 10% rise Impulsively  in the months to come using this as an operative and tradable count presenting a low risk entry.


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## gartley (2 April 2015)

rimtas said:


> Short term subdivisions proved that BHP is on the run in an Intermediate Wave (D), which should take the rest of the year and Top in the $45-50 range before the (E) wave crash. I will use any correction as a BUY, I am confident that ~27 bottom will not be breached. With Iron Ore bottoming(for a dead cat bounce), and market overall in a positive wave, BHP should sport another wave for a long term Triangle pattern.
> 
> 
> View attachment 61827




Rimtas. You still working with the triangle?


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## rimtas (2 April 2015)

Yes, longer term my main preference is a Triangle, with waves D and E missing, which should take a few more years. It is amazing to see how BHP is holding strong in the face of crashing Iron Ore.

 Logic tells me that I should avoid buying it, but from the bottom BHP sported an Impulsive advance, which is basically a sign that another leg (up) of Triangle has started. Usually when I follow a logic I miss good opportunities and when I follow waves I make money(in most cases).  So I decided to wait for a perfect setup that the ongoing correction should provide in the weeks to come. I'll post an entry chart if I see it.


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## rimtas (5 April 2015)

I want to return to TLS, which is forcing to think me harder because I realized a first loss in a year and still holding another position which is in the grean (entry at 5,60).  

The most recent decline from ~$6.70 top is too big already to be any part of the wave that started in Oct 2014. It can still be part of the wave that started  in January 2014, but in this case in should shoot straight to new highs and never look back into sub 6 territory again, confirming that larger degree third wave is in progress, which should top close to 1999 highs.

But when you look at monthly and weekly charts, there is a strong "feel" and "look" that the advance from 2010 bottom is a Five wave rally, which is complete. TLS retraced the exact 61.8% decline from 1999 top, which is another evidence that prices can encounter a resistance to rise any further.

Sticking to the count(in previous page) that generate loses is not a way how you can make money, so in this case I am dropping my bullish stance on TLS and placing a protective exit on the remaining position at $5.90, which if executed leaves me with a small profit and last dividends paid.  

The most important signal that the trend in TLS is turning would be 
1) break of the ascending Impulse Channel which runs ~$5.9 in April and a bit higher later.
2) The price will decline to ~$5.65 area. In this case it is the classic reversal sign when the price retraces the "fifth" wave to it's second wave. 
Basically those two signs will be a strong evidence for reversal, but to confirm them we need the most Important one-a decline from the top should sport five waves down.  It looks like five now, but only at the smaller degree, price is still in the Channel, so it is too early to panic and sell, unless entry was above $6.4.

I may change my thinking again, but at this stage I will not be putting any fresh money into TLS before the count resolves itself to the point where new entry signal is generated. The rise above $6.7 would be return to bullish count, and the drop below  $5.90 is a bear signal for the entire rise from 2010.


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## rimtas (12 April 2015)

I was not looking much at the All Ords recently because I believe the ongoing correction is still in progress. At this stage there is no confidence to say that the Shape and size of the pattern is complete. Still too many alternatives remains, though it already took 6 weeks to drift sideways.

My main focus is that wave ((iv)) is developing and after one more push down to ~5700 levels the final wave to new highs will follow. I am not ruling out the posible Triangle pattern, which could take another 4 weeks or more to develop. If I am able to identify the end of wave ((iv)) bottom, I'll post a chart. 

One more way to look at the bigger picture is that  the entire rise from the end 2014 is only another first wave in a series of 1'st and 2'nd waves, thus a deeper correction can occur. 

Bearish News, RBA actions and analyst consensus opinions confirms that the bull trend is in the works. The talks about recesion started to resume recently again, saying that sideways market movement is maturing.






Most recently the Entire Asian Pacific Region posted a big gains that took everyone by surprise.  From 2010 it was mostly the sideways movement for the Index, but India, Taiwan and China broke out early in this period, putting a positive presure on the remaining countries-constituents.  
The most likely scenario is that the strongest and longest bull wave (Primary 3) has started in the Region which should last years and post the biggest gains. 

As an Example I'll post the Hong Kong's  Wave Count which strongly consides with Asia Pacific Index. 
A good anectotal evidence was recently cathed by media when few analysts returned from China and said that It is doomed for decline. This mesage spreaded like a plaque among financial channels, but China rallied instead sporting the biggest advance in the last 5 years. Widely spread bearish pinions are a good fuel for the market to lift off. Afraid, thus long.


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## gartley (15 April 2015)

This market is struggling. This is a terminal pattern in progress not a wave 4. I stand by my analysis of some weeks ago that a correction is imminent starting this week and terminating into June. We will see 5100-5200 before we see your expected 6150. I will post more analysis that adds weight to this later. 

Relying only on Elliott waves is not high probability as there can be many possible wave counts at any given degree of trend. In isolation it's simply not enough to build a case for a high probability entry.


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## Porper (15 April 2015)

gartley said:


> Relying only on Elliott waves is not high probability as there can be many possible wave counts at any given degree of trend. In isolation it's simply not enough to build a case for a high probability entry.




Although I am an Elliott enthusiast I totally agree. The Wave theory is best used in conjunction with other techniques/patterns to confirm or cast doubt on the wave count. I tend to use time analysis but anything that works for you will suffice. That said I disagree that we are going to retrace immediately but we'll know soon enough.


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## rimtas (16 April 2015)

Thanks for your critique guys, but I am resistant to it. If you need any other methods to use with EW, it is your choice.  I don't.

After reaching lower range at 61,8 retracement, OIL is developing a new wave. I am looking for another five wave advance towards ~70, unless it crashes from here forming a wave that is part of the bigger correction. 
 Oil stocks and BHP should do well if you consider there is a correlation between oil and energy stocks.

View attachment 62300



View attachment 62301




All Ords has a nice looking Triangle here as wave ((iv)), so if market shoots up to new highs, consider this is a valid pattern. The decline below 5866  from here would say that something other is developing, but in the end I am looking for one more wave to new highs where I drop a few stocks from my portfolio and lock in some nice profit that accumulated from Dec 2014.



View attachment 62302


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## Boggo (20 April 2015)

rimtas said:


> All Ords has a nice looking Triangle here as wave ((iv)), so if market shoots up to new highs, consider this is a valid pattern. *The decline below 5866 from here would say that something other is developing*, but in the end I am looking for one more wave to new highs where I drop a few stocks from my portfolio and lock in some nice profit that accumulated from Dec 2014.





Wave 4 still in progress, no real change from this post of the daily XJO
https://www.aussiestockforums.com/f...=15355&page=20&p=863316&viewfull=1#post863316

Sub 5700 still on the cards


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## rimtas (20 April 2015)

Agree. Financials and Mid Cap50 index shows that we are probably half way through wave ((iv)), so a bit of a drop should shake out some more bulishness to keep the trend going up later.
Mid Cap50 even looks like the correction has just started, but first I will be looking for the prices to reach the lower channel line, where some sort of terminal pattern should emerge.


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## rimtas (21 April 2015)

BHP has a nice three wave correction at this stage, so probabilities for a next leg of advance are very high.  If prices take out the extreme of the (b) wave Triangle (31,50 pivot), most likely they will shoot higher, and if previous top of 34,3 is taken, then we  have a confirmation that wave ((iii)) is in progress, which should advance at least towards $38 levels.
Alternatively, the decline below 28,75 from here most likely find a bottom at ~27,7 sporting another valid corrective pattern for wave ((ii)).


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## rimtas (24 April 2015)

BHP took out the important level today, opening the door to the next pivot of 34,30, which when breached, confirms that third wave (of A) is in progress. I expect Wave A  to top somewhere in the 40 area sometimes later in the year.


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## rimtas (28 April 2015)

There are more and more evidence that the ongoing correction can take the shape of the Triangle. Since the begining of March Market is moving in "threes", making higher lows. For the pattern to be complete Market must crash now into 5850-5800 area, completing the 8 week correction. 
As (e) waves in the Triangle are terminal movements, basicaly like fifth waves, they carry a lot of momentum and sentiment gets very low at the end, many bulls capitulate and news gets gloomy.  

Triangles in most cases generate a powerfull Thrust, like explosion to the upside, in this case I would expect 6200 area to be reached in a short run. 






There are still a number of scenarios probable appart from Triangle, (with 3-3-5 flat next most likely) but at this stage the terminal move down has the highest probability.  
If market rises from here to new highs, the probabilities for an expected wave ((iv)) will turn slimm, making an even more bulish case than I expect short term.


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## rimtas (28 April 2015)

A few days ago I noticed that both retailers WES and WOW were sitting nicely near the long term trendlines, and then bounced to the upside , confirming that market sees those supports important for the rising trend. 










WES has a clearer picture than WOW in terms of EW pattern short term. It completed a nice three wave correction and sported a small five wave upside movement, which confirms that the trend has changed. If price manage to take out the pivot of 44,7 of previous wave (b) , it  would build a strong case for the next bull wave to ATH, which would be a third wave and carry to at least 55 in the months to come. 

WOW  needs to overcome more strugle in order to build a bullish case-it needs to take out 34,70 and sport some sort of Impulsive pattern  to confirm that the decline is over.  If WOW declines and lingers well below 28, I would lean towards long term bearish case (towards 20) which I discuss if this event materializes. But for now I am long WOW and looking towards higher levels.






Looking at the banks wave subdivisions, it doesn't look very shiny, so I believe the next leg of advance would come from mining, energy stocks and retailers.


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## gartley (30 April 2015)

rimtas, looks like your wave 4 will be a non event. The way I see it, wave completed already and wave 5 was a truncation.

The long term Gartley pattern I posted indicating a multi month decline is about to start was triggered this week at the 0.786 retracement.  There was too much confluence there from fibonacci, pattern, cycles and even EW making it a good bet.

We are bearish at least until mid June and more likely into the months following that.


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## rimtas (30 April 2015)

gartley said:


> rimtas, looks like your wave




Well, it's not mine... Market tells the story, you read it. Many people read market in different languages, so the outcome is different to everyone. EW, Gartley, MA, Stoch, Fundamentals -they all tell different stories. 

By the way,_ Your_ Gartley pattern could be correct-Prechter just issued interim report saying that Dow Top occurred yesterday, and the biggest bear market in history has just started. So tighten your seatbels, mates...All Ords will crash to 1000 till 2016.


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## rimtas (30 April 2015)

gartley said:


> We are bearish at least until mid June and more likely into the months following that.





I know, it is popular to be bearish nowadays, because it is very hard to build a bullish case using todays fundamentals and economy, which are crap, to say at least. 
But the question is whether you want to be outside the market progression, which is always Up? Bears usually miss bull markets, which is the only time money can be made.  And if you do not see a major crash (more than 50% down), there is no point to stay away form the bullish trend, which I believe is in the early stages of development long term.


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## rimtas (1 May 2015)

TLS has a similar-looking pattern, which could be considered as a series of the Quasi fractals expanding to higher levels. Though it is very rare to see a three fractals in a row, there it is. Now it is up to the market to prove it's validity. 
The best setup would be if this third fractal could be in line with EW count, but it isn't.   From the last bottom at 6.12 TLS is moving in threes, so probably downside move from here would be able to resolve this situation.  Even 6.08 would still keep Fractal in tact, but lower levels would definately desintegrate it.

I never trade third Fractals because of their low probabilities, but I decided to post this chart out of curiosity.
If it holds, TLS price should skyrocket from those levels.


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## rimtas (2 May 2015)

Futures chart is a bit different from cash index, but at the moment is has a better wave structure in terms of completing the correction. 
It can still make one more wave down to just below 5700 , but for the next bull wave to start it is not required.
 Corrections are a bit frustrated to wait through, but in the end they provide opportunities to join the trend.
I Expect Monday to open in green.


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## rimtas (2 May 2015)

Iron Ore made a nice sharp advance, breaking out from the near term downtrend. The best move is to think that wave 3 of larger (C) has bottomed, and wave 4 advance is underway. It could take many months or even couple years for wave 4 to develop, but idealy Iron Ore should rise towards 80. This rise is in line with my BHP forecast for higher prices as well.


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## rimtas (4 May 2015)

Last few sessions All Ords developed into five wave advance, which means that after some consolidation it should go higher later and the last bottom of 5733 should hold for now.


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## gartley (6 May 2015)

rimtas said:


> I know, it is popular to be bearish nowadays, because it is very hard to build a bullish case using todays fundamentals and economy, which are crap, to say at least.
> But the question is whether you want to be outside the market progression, which is always Up? Bears usually miss bull markets, which is the only time money can be made.  And if you do not see a major crash (more than 50% down), there is no point to stay away form the bullish trend, which I believe is in the early stages of development long term.





Nobody can predict the long term future, but if there is a confluence of technical analysis suggesting a 15% fall from the 6000 point peak in the months ahead, why on earth would you want to be long stocks???? 
Surely better to be in cash or short from a R/R perspective


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## rimtas (6 May 2015)

gartley said:


> suggesting a 15% fall from the 6000 point peak in the months ahead, why on earth would you want to be long stocks????




As a trader, you probably wouldn't. But for those, who bought stocks for dividends, even 30% drop should not scare them out of the market, right?  Though I don't see any logic here, but many financial analysts and media makers say that market movements doesn't matter if fundamentals of any given stock are sound. 
The problem with this is that fundamentals are the soundest near the top, and then gradually deteriorate until the bottom is reached. Some stocks go under, others stop paying dividents, some try to issue new emissions when the time is wrong...Bottoms sucks. 
You need a good deal of experience to actually hold cash until it develops and start buying despite your limbic system is at the highest level of alarm indicating the biggest danger.


By the way, you don't need to guess long term trend-it is always UP.  What matters along the way is the degree of the correction you'll be caught in. If you hold index, you can be almost 100% sure that it will climb back at some point in the future (if you are young enough, some corrections could last decades or even centuries). But stock picking is a risky business, they can go under in bear markets.


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## rimtas (6 May 2015)

3 months ago I posted  a chart of WBC, noticing that it has the clearest wave structure in the market, this means highly  forecastable.
it looked like this:






As the price reached the lowest point in the previous chart, it is time to evaluate what is happening. From the Top WBC declined in three waves, with the bottom in today or slightly lower tomorrow.
 Then, 2 scenarios could develop:
1) it should start an Impulsive rally; 
2) it will drift sideways and then decline, sporting a five wave decline from the top. This development will have a bearish consequences for the rest of the year. So  what happens short term, will draw the medium term trend. 

I see some signs in various other markets like Nikkei, SPX, Nasd Comp, Dow Utilities that can be labelled as toping, but on this later, first I need to wait for a five wave decline to make a confident forecast. 

With these two WBC charts I want to point out that anyone can use EW to their advantage, as It gives you an edge to understand what could  happen at any given point in the market. Just for a novice it is not so easy at it seams.


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## Boggo (6 May 2015)

From here - https://www.aussiestockforums.com/f...=15355&page=21&p=867003&viewfull=1#post867003



Boggo said:


> Wave 4 still in progress, no real change from this post of the daily XJO
> https://www.aussiestockforums.com/f...=15355&page=20&p=863316&viewfull=1#post863316
> Sub 5700 still on the cards




Well that has been achieved, took a while though.
We are now in the turnaround zone (or are we ?).

The right side of that zone (time) is the 12th May.

Charts of XJO and XAO - click to expand.


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## rimtas (6 May 2015)

Boggo said:


> We are now in the turnaround zone .






Agree, it's do or die at this stage. Crash should stop tomorrow and rally should start latest next monday. 
Otherwise things will get ugly.
The best stock just poised for a rally to new highs is WES.


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## gartley (7 May 2015)

rimtas said:


> Agree, it's do or die at this stage. Crash should stop tomorrow




Crash may only pause for a while. It's higher probability we will continue bearishly until next major obvious support at 5150. That is where I am looking to completely exit short from this swing from 6000. Ofcourse will look to take partial profits before then.  I have posted 2 charts in the attached excel file to explain this. 
Firstly looking at the AUS200 chart. The upper pane shows price in the blue, a centered moving average (pink line) extended forward based on algorithm I developed, and 1st,2nd and 3rd std deviations of excursions of price away from pink line. 
I learned a long time ago that in order to be consistent one needs to ONLY take high probability trades and more importantly think in probabilities. That's why I am very risk averse and look to bet small to make big via big swing trades.

Price movement comprises a trend and oscillations within a trend.  In these charts it can be seen that prices oscillate or move from extreme to another. Extreme being between the 2nd 3rd std deviations or or more away from a centered moving average. When price does reach such an extreme it has a very high probability of reverting back to the centered moving average and more than likely the opposite 2nd and 3rd std deviations.

If price does not reach an extreme or climax a trend will persist until it does.

So looking at the AU200 8hr bars chart one can see we have reached the upper extreme and the probability was very high we would revert to the mean at the pink line and even further below the 3rd lower std deviation as we can get a throw over in a panic market.

More importantly if one looks at the monthly SP500 chart cycles chart it can be seen that it's high probability that we revert to the pink nominal line which sits at 1800. However if we move to the other extreme we are looking at about 1500. As can be seen, 1,2, 4 Year cycles have all topped.

Time will tell ofcourse, but at present I favor the downtrend to persist.


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## rimtas (7 May 2015)

Futures made an overlap today, eliminating the expected wave ((4)) probability. 
This means that if one is holding long positions, there will be no new highs in the immediate future as expected, and most likely market will develop an Impulsive decline, which at this stage appears to be somewhere in the middle.   
Sometimes overlaps occur when market is developing series one's and two's, but we have  WBC, ANZ, BOQ as an example that this 2015 rise was a Thrust out of the larger degree Triangle. 






This Triangle as Wave (4) (per chart below) was initially posted by EWI Asia-Pacific analyst and I always kept it in mind as a possible alternate scenario, especially when banks had a nice looking Triangular structures as well, which I noted last year in my analysis.

So basically one small missing wave which I expected in the last 8 weeks, is throwing the entire All Ords structure back to the same point where I started in the mid of 2014.  

Three wave rise from 2009 leaves a trader like me in crossroads, because there are two main scenarios what could happen next. I believe I noted this already last year, but to spare anyone's time from browsing through previous post I quickly discuss main probabilities:

1) The rise from 2009 is three wave advance, or simply put- a correction. This means that market will decline below 2009 low of  ~3100. To confirm it we need a sizeable five wave decline to appear from the Top.

2) I labelled it as per Alternate line. It means that a series of first and second waves are developing. To confirm this scenario market needs to decline in three waves and then start a sizeable rally making an overlap.

So basically short term both scenarios are looking down. Thrusts out of the Triangle are a swift affair and after they top out, they get completely retraced to the point where they start or a slight below, giving us an Initial Target of ~5125. When those levels are reached, I look at the structure and most likely there would be a nice entry point to ride up an oversold market.


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## Muschu (7 May 2015)

rimtas said:


> Agree, it's do or die at this stage. Crash should stop tomorrow and rally should start latest next monday.
> Otherwise things will get ugly.
> The best stock just poised for a rally to new highs is WES.




And the prospect of a rally start by next Monday is now looking remote?

Appreciate your analyses and comments Rimtas.  As an older investor, pretty much retired, I find the volatility frustrating and expensive.  Might sound strange - but sometimes amusing too.  

And I don't want to spend my days analysing and watching the markets.  There are so many more important things to do.

Regards


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## Value Collector (7 May 2015)

Muschu said:


> And I don't want to spend my days analysing and watching the markets.  There are so many more important things to do.
> 
> Regards




Once you have a portfolio of good diversified companies you don't need to do a lot of work, If you owned a such a portfolio you don't have to worry about volatility, you could have held cba right through the gfc and you would be in a better position today than you were before the gfc.


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## rimtas (8 May 2015)

Muschu said:


> And the prospect of a rally start by next Monday is now looking remote?





The do or die date for a rally was before the overlap between waves occurred. So basically it's a die.  
Even if we had the last fifth  wave to 6150 as I was expecting, things would have crashed after it anyway. 

But there is nothing to worry about at this stage if you are a long term investor. I have no any stocks at the moment, but my super is 100% in stocks.  Later in the year I expect a situation to be much clearer and I will decide whether I should be out of market completely or jump in again.

The major concern is US market-optimism there is so elevated and for so long, that red lights are flashing very bright.  
I'll have more analysis re this later.


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## gartley (8 May 2015)

rimtas said:


> Even if we had the last fifth  wave to 6150 as I was expecting, things would have crashed after it anyway.




How do you know that??? Elliott Wave is not gospel, absolutely anything is possible at any time and there are no certainties. Market could have just as easily continued trending to wherever it wanted and made fools of all of us as it usually does with most who trade it anyway.



rimtas said:


> But there is nothing to worry about at this stage if you are a long term investor. I have no any stocks at the moment, but my super is 100% in stocks. Later in the year I expect a situation to be much clearer and I will decide whether I should be out of market completely or jump in again.




Really???  A long term investor who invested in the Aussie Market in 2007 would be down to breakeven now. If they invested in the FTSE in the year 2000 the same, and if you invested in the Nikkei 25 years ago you would still be down 50%. 

As soon as you have a position in a financial market you are at risk ( unless you have a crystal ball) and have everything to worry about. You must have a trading plan to go with that trade. A clearly defined and written strategy to escape. 
The only things we can control is how much money we risk and keeping our emotions in check. Market will not differentiate between long and short term investors


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## rimtas (8 May 2015)

Thanks Gartley for your valuable input.  I know, stocks worldwide got overvalued and overbelieved in the last decades as an investment panacea (like real estate as well).

Looking back at the market, financials crashed the most, and the Financial Index looks like having the strongest third wave already in the past. This means that it has declined in three waves, thus a countertrend rally should start soon(maybe it started today). 
If banks go sideways in the week to come, it would be a good indication that a fourth wave is in the works, with fifth to new lows to follow after. That's where the buying spree begins. 
I expect this wave  A to be "five" and bottom out at the previous Triangle Apex-at least this is a clasic market behaviour after the development we had in the last year.
A waves sometimes could be "threes", but in this case everything gets more complicated and time streched, so I 'd better folow the simpliest path, as usually it is always the best.

Chart is Daily, so patience is required, the whole scenario could take few weeks at least.


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## gartley (8 May 2015)

Looks like we might get a bounce into Monday/Tuesday. Have taken a very small position with a stop at 5574. Cycles look to have turned up for now, but how far up we go not certain, it may morph into a sideways move


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## rimtas (9 May 2015)

In the light of recent events I checked few  world indices-Japan, China and US tech Nasdaq. The most interesting apears Nikkei, which can be labeled as a five wave advance from 2009 bottom. If you throw in some oscilators like RSI, MACD, Jurik or any other measuring the speed of the price advance, they all are diverging in the last (5) wave comparing to (3). 
Wave subdivisons, especially in the last waves, are textbook "fives". Even more, from the Top Nikkei declined in a small "five" which could be a precursor to a trend Change.  Time will tell, but I would be very cautios about the further advance in Nikkei.










The next one is China. Just few weeks ago China was making headlines with the facts about how "mum and dad" _finally_ got into market, how margin lending skyrocketed and that a record of 4mln new accounts were opened with the intent to invest in stock market as "it had a nice performance". When those  types of social events are accompanied with the complete looking wave structure, one must be very cautios. 

A technical side comprises a Three wave rise from 2008 bottom, separated by Triangle. Triangles usually means that the Thrust out is final. The overall picture in this chart could be pointing to another GFC type event with wave (c) down next.  "Mum and Dad" buying could be the good sign that the trend is mature.
 Note that this is the ETF chart, which is a bit diferent from actual Shanghai Composite which is still well below 2007 high.





US indexes are all fractured, having different wave structures, making it hard to draw any confident conclusions. The global representative Dow Industrials looks like having an Ending Diagonal in the works, but no confident forecast can be made in relations to a short term move. 
But looking at the Nadaq Composite it sits just few points below the Dot Com Bubble High. The double Top could be in line with wave labeling, pointing to the final subdivisions of the corective Three wave rise from 2002 bottom.
  Given the fact that optimizm towards US stock market is the highest in history _ever_, the reversal could be from here. 





Well, Australian Market just completed a Three wave rise from 2009 bottom, what a coincidence with those other markets above, all reaching some sort of technical turning points.

But the Only market having an Impusive decline yet is Japan. (if not to mention Dow Utilities which toped out many monhs ago and crashed since). If other markets will start falling Impulsively, we could have more evidence that something important is happening.


Also, I just remembered the article I've read on ZeroHegde on April 13, reporting by A. Giryavets from Dinamika Capital. He posted a thirteen year long index reflecting the rate at which corporate loan applications at banks and other lenders are rejected each month, as reported by the National Association of Credit Management. As best I can tell from this chart, the Y axis denotes the points' deviation in the index from the midpoint of the data series at 50. 
The plunge in the final bar can be called a "light swich" event. Sudenly in March 2015, banks and other lenders rejected business loan applications at a rate that must be at record high since the 1940s. Wow. Here is one more amazing indicator of monetary and economic weakness in the face of stock market strenght. Measures such as this suggest that difference between aggregate stock prices and companies' true values is the highest _ever._


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## gartley (9 May 2015)

Nikkei had a 20 year cycle low in 2009. It will not see new lows but  most likely a retest of those lows and thereafter  a great buyiing opportunity.


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## rimtas (10 May 2015)

There was a good study made last year about global debt problems. According to a February 2014 study by the McKinsey Global Institute, “Debt and (Not Much) Deleveraging,” total global debt is up 40% since 2007 to $199 trillion. As a percentage of GDP, “debt is now higher in most nations than it was before the crisis” of 2008/2009. On average globally, it is 286% now vs. 269% in 2007. I am sure those figures are much higher by now.

Despite the economic rebound since 2009, McKinsey found that the debt of households, corporations and especially governments continues to rise. “Governments in advanced economies have borrowed heavily to fund bailouts in the crisis and offset demand in the recession.”

McKinsey warns of potential risks created by the latest surge in debt. But the danger is far larger and more imminent than the report suggests, as evidenced by Exhibit 12 in the study, which is reproduced below. The table shows GDP growth projections as well as “additional growth needed to start deleveraging.” The graphic shows 13 countries’ projected growth rates and how much more they must grow to reach the point where their debt burdens are sustainable, that is, to reverse the debt balloon.
Unfortunately Australia is not included here.






Over the next five years, these countries would have to maintain an average growth rate of 3.3% just to be able to retire some debt. Of course, the very idea that anyone would reduce debt in a growing economy is a pipe dream.

Behavior during the latest recovery proves that today’s mindset is driving people toward maximum indebtedness given any excuse.

The only thing that will stop them is outright depression and a turn toward that is not far away. Despite historic central bank stimulus, many global economies are on the path to outright contraction, signaling a heightened danger to the global economy.

In April, “business activity weakened in China and Japan and slowed in Europe and the U.S., suggesting the global economy may be less robust than policymakers are predicting.” The official IMF forecast calls for global GDP growth to exceed 3%, but the IMF’s chief economist concedes, “the world’s potential growth rate could be shrinking.” The U.S. is supposed to be the “growth star,” but a series of weaker-than-expected economic reports appeared in April.

_“The U.S. Economy hasn’t Disappointed Analysts This Much Since the Great Recession,” _says a Bloomberg headline.

U.S. businesses are pulling in their horns.

In March, orders for business equipment fell for a seventh straight month and first quarter corporate fixed investment fell at a 2.5% annualized rate, the most since the end of 2009. Growth prospects are far weaker than economists will admit, and that reality is causing credit conditions to deteriorate markedly around the world.

There is more to say, but the bottom line is that all of this is happening in the light of rising stock market. In bull markets, rising stocks tend to drag economies behind them, and the further they rise, the stronger the fundamentals become.
Looks more like bear market rallies which tend to go on their own, leaving the economies on their own. Funny times.


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## rimtas (11 May 2015)

WOW made a solid close below long term ascending trendline (on arithmetic scale).
 When this kind of thing happens it  signals that the historical trend is over and most likely scenario is that a new bear wave is developing.  I am not sure about medium term subdivisons as from the Top WOW made 7 waves down.  But if you switch on a weekly,  the drop from 39 to 29 can be interpreted as the first wave down, then the second wave made a sharp rebound and the third is developing now. 

Basically I am out, as situation is unclear. There was a good chance of rebound from ~28, it haven't materialized  so there is no reason to be holding it here.  
In a micro scale WOW just  dropped in "five" so expect a rebound to ~28 in coming days, this could be a good point to take a principal from the market.
Next support shelf is around ~23 mark, so if the third wave is in the works, it should stop here. But the bottom line is that WOW entered a phase at which forecasting is a waste of time. It needs to sport some sort of recognizable pattern, thus it is better to wait for more waves.


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## rimtas (11 May 2015)

It was pleasure to forecast waves in oil in the past 6 months.  Todays structure unfortunately enters into a stage where there are an increased number of alternate scenarios due to the rise in Three Waves from the bottom.

The fact that both Impulsive waves (A) and (C) are almost equal in length and advanced within the parallel lines, makes the entire 5 mo rise look corrective. In this case I would expect OIL to drop below lower line(somewhere ~$60), and this would add to the bearish case which points to new lows below $46.
If line holds and OIL goes above recent high of ~70, we will not see new lows this year, and probably the year after as the bigger corrective pattern will take place instead.

In a smaller time frame there is a nice five wave decline, so after the short rebound OIl should collapse in a third(or C) wave bellow $64.


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## gartley (12 May 2015)

Having a look at the All Ords in terms of time studies. The following Medium Term Delta studies I used as a guide only. Taking the analysis at face value, it suggests we decline into the 3rd week of May, have bounce perhaps for a week and then the final cycle bottoms into 1st or second week of June at point 1 in between the vertical red and blue lines. This same cycle low ( point 1) historically as marked by green arrows was a low and pivot for the last 2 years in the 1st to 2nd week of June time period.

It should be noted that the cycle point number 14 shown by the blue arrows and in between the vertical green and red lines was a high in April for the last 2 years suggesting that this year we have a high in April too. That is how with high probability ( alongside other cycles tools) it was possible to forecast this turn with high probability weeks in advance. It should be noted that red points 15,16,1 are points in time and their position relative to the  y axis is not being considered here.


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## rimtas (12 May 2015)

There was quite an event recently about Chinese market Margin Debt levels, but they are not alone.
 After lagging for a year, NYSE margin debt rose to a new all-time record of $476.3 billion in March. The lower line on the "Maxed Out?" chart from EWI below shows the level of free cash available to customers of NYSE member brokerage firms (inverted to show extremes against major stock peaks). The figure shows the aggregate balance in NYSE margin accounts once total margin credit is subtracted from cash accounts.






At negative $191 billion, the record high in total net debt is 48% higher than it was in 2000 and 240% higher than 2007.
So, contrary to the belief of at least some analysts, the use of credit in stock market accounts is as excessive as it has ever been.
These figures can go higher, but historically a Margin Debt indicator shows the highest borrowing near market Tops, indicating that the fear has vanished and people have a perception that debt is not a problem.


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## rimtas (14 May 2015)

If All Ords reached a Primary degree top last month, this event should be confirmed by the five wave move down from it. Short term subdivisions shows that market is declining in "threes", so the only pattern that could emerge and be valid as an Impulsive wave is a Diagonal, in this case an Expanding one.

Chart below shows a preliminary path of the pattern. It just needs to rise and fall in corrective waves and be within the boundaries of the expanding Diagonal. Something other than that will invalidate the case so this current developing  move up is quite important, because at this stage XAO from the Top cannot be considered as an Impluse Down. 
 Futures chart doesn't fit well into this scenario, so I'll be monitoring both to see what is happening and which one will sport an Impulsive wave down first(if any).






The reason to think that All Ords has toped month ago, is the big4 wave structures. All of them sported five waves down, with WBC (again) having the clearest subdivisions. This means that this drop from the top is part of the bigger wave down, and at least one more "five" should develop later. 

 WBC is fast approachig the bottom  of fifth wave in the Triangle Apex resistance zone. I expect it to bottom out above $32 and then the corrective advance to push the stock higher 10-20% in the coming months, probably with $36 being the most likely target.


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## rimtas (16 May 2015)

TTS just continued a sideways correction invalidating the case that this could still be a part of a third wave.
So I m going one degree higher and looking towards the Minor 4 instead of the Minuette 4 (as noted in last post about TTS). 
Price action respects the upper breakout line sporting a higher lows.  This leads to think that a Triangle could be developing and waves (d) and (e) should take a few more months to appear.
But the bottom line is that the Impulsive advance will follow after, Thrusting to ~4,5 area or higher. This is very high probability scenario as it is hard to find any bearish alternatives here-price moves in "threes" and higher, which is bullish.


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## Boggo (16 May 2015)

Boggo said:


> From here - https://www.aussiestockforums.com/f...=15355&page=22&p=868558&viewfull=1#post868558
> 
> Well that has been achieved, took a while though.
> We are now in the turnaround zone (or are we ?).




Back out of the the retracement area, hesitation as we approach 6000, then a break to above 6100 ????

(click to expand)


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## rimtas (16 May 2015)

Hong Kong HSI needs to consolidate in fourth wave and then shoot higher to complete an Impulsive advance before the biggest correction since late 2014 begins.


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## rimtas (17 May 2015)

Weekend reading.

Several articles have quoted bulls as saying that there is a huge amount of “sideline cash” available for investing, so the stock market will go up for years. I don’t say that it can’t, but certainly not for this reason. The idea of “sideline cash” is bogus on two bases. 
Fundamentally there is no such thing as expansions or depletions of the amount of cash available for investing due to the accumulation or distribution of stock.  The claim relies on the erroneous idea that the cash to buy stocks is somehow “used up”. But cash is merely the medium through which stocks are traded. The amount of cash in circulation is what it is. It doesn’t change because a buyer delivers his cash and because the seller receives his cash. It is still here. Any amount of cash in circulation can support a runaway bull market. All that need happen if for investors to keep exchanging stock at higher prices. If there were a total, of say, a million dollars in circulation, a stock selling at $100 a share could rise all the way up to $1000 and then to $10.000 and then to $1.000.000 and then to $5.000.000 a share with the final $4m of the value pledged as an IOU.

There is however, a flexible pile of cash that people have earmarked for investing, for example in brokerage accounts. This amount can change over time.   Ned Davis Research (always a font of useful statistics) recently reported the fact that today the amount of cash sitting idly in brokerage accounts minus the amount of margin debt is at an all-time low. Also, something similar has been noted about money market funds: “as a share of the total market cap of the entire stock market, current money market fund assets are very low by historical standards, only 11,3%” (mark Hulbert, Market Watch, May 1) This is basically a bearish indicator for the stock market. Even so the total stock of cash doesn’t change because of these investors’ activity, and neither does the total stock of corporate shares.

 What’s happened is that money previously earmarked for investment has been used buy stock, and stock prices have risen, pushing cash balances in money market funds to a lower percentage of the total value of stocks. This would be true even if the number of dollars in money market funds hadn’t changed, and it is true even though the total number of shares investors own has hardly changed. The key element of all these measures is not the using up of money or the accumulation of more stock. The key element is decisions by investors to trade stocks and money with each other in such a way as to push up the prices of stocks.

One can certainly claim that there is a lot of cash in existence. The FED has inflated the supply of dollars at a record rate since 2008, turning the government’s T-bonds into cash. But now the “sideline cash” argument is reduced to the same argument that the bulls in commodities and precious metals have used: The Fed has printed a lot of money. But this argument has failed to stop a seven year rout in commodities and a four year plunge in the price of gold and silver, so it hasn’t proved useful, either. 

Davis also investigated household’s free liquidity, i.e., “non-equity liquid assets, net of liabilities”. He found that “as a percentage of the stock market’s total cap, this free liquidity stands at 39,8%. That’s not only lower than what was registered at the 2007 top, it is the lowest in 60 years with only one exception- the top of the Internet bubble.” This is the kind of indicator that is historically bearish for stocks as well.  But is has nothing to do with a depletion of cash. There is more cash around than ever! What the figure means is that the cash held by the middle class in the US minus its debts, is low relative to stock prices. It is not a cash crunch, it is a stock mania compounded by a debt bubble.


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## rimtas (23 May 2015)

Couple weeks on since the last short term update. I am not sure about All Ords count, so I use a parallel Indexes to determine what is going on.  This post is more of a technical side, so anyone unfamiliar with the Wave Principle can find it difficult to understand and even boring. 
On May 8th I posted a Financials chart that showed an incomplete Impulsive wave with one more new lows missing. It looked like this:





Well, there we are, I think this is it.  Financials crashed in five waves down, pointing that a medium term trend is down. But before we get another wave lower, the sizable multimonth correction up should develop, retracing a part of most recent decline from the Top. It is worth to look at Big4 now for position trading. 







It is quite challenging to determine a longer term trend in All Ords due to three wave rise from 2009 Bottom, but looking at it’s major drivers we can get a clue. I think CBA is a good example, which have also risen in three waves from 2009, just it stands now at All Time Highs. I posted a few quick thoughts about CBA here  https://www.aussiestockforums.com/forums/showthread.php?t=736&p=868553&viewfull=1#post868553

I since snapped the idea and decided to look deeper whether there are any relationships between waves as the best numbers can point to wave structure in progress.  I found that second scenario is more valid due to “right look” and because it has nice relationship between Impulsive waves (1) and (3). 

In this case the proposed Wave (3) toped just a few points shy of 1,618 times the length of Wave (1), which is a common target for any wave 3. Also, market respects the Uper trend line, that started at the top of Wave (1) with a few touch points.  Following this, the rise from 2009 is incomplete and needs wave (4) and (5) to complete the structure. 

If Wave (4) is now in progress, the best Target would be at 38,2% retracement level of wave (3) at $76.  CBA dropped in five from the top, as the Financial Index itself, so short term it should develop a multimonth correction up, and after another Impulsive wave to follow to $76. This scenario could take the rest of the year or even more, but when prices reach the lower channel line, it can be considered that wave (4) is over; or if Triangle is in works, its wave A extreme can mark the bottom of correction. Chart below shows the scenario graphically.







The CBA example doesn’t mean that All Ords can be counted the same as the constituents within are highly fractured. Small caps are almost near the bottom of 2009, midcaps are somewhere in the middle and large caps almost reached 2007 top if looked the charts from 2009. 

But the opposite is true in a short term-Large stocks got heavily sold out from the most recent top, making important overlaps that are negating a case that this is a correction(it’s a new short term trend). Midcaps were somehow resistant to steep dives and Small Caps are even at new highs. Large caps are usually traded by Institutional and traders with experience, while small caps are a retail traders targets. Probably retail are thinking that there
are bargains everywhere and they just kept on buying those penny stocks.








My favourite stock to trade is WBC due to nice wave structures, presenting low risk entry/exit setups. 
As other big4, WBC has a nice five wave decline and I would say it is either bottomed or Monday will bring one final wave to the mid $31. Using Fib relationships, wave 5 would be equal 1,328 times of wave 1 at ~$31,6.
  Buying at these levels one could expect WBC to retrace some portion of the decline ranging between $35 and $37. But as the rise would be considered a correction, it could be a tough and volatile ride with market trying to push the time scale further instead of working on a price rise.


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## rimtas (23 May 2015)

Continued...

This is the bigger picture of projected WBC path, based purely on CBA.






One more evidence that the market is turning short term can be seen in an hourly chart, where a small five wave advance developed last Friday.  It can point to a bigger trend up lasting months, or it could be just a part of another small wave up sequence.
I can speculate on the short term subdivisions from the top, but if considered that each wave was a “Three”, the decline is indeed an Expanding Leading Diagonal which can be seen only when connected the extremes of the Motive waves and ignoring the extremes of Corrective ones. But it is highly speculative, and more based with the thought in mind that banks should rally soon, so a bit of wishful thinking was involved, please take this one with a grain of salt.






I had a nice few hour weekend writing, hopefully reading it was not boring, 
Cheers


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## rimtas (26 May 2015)

Banks turned as expected, with Westpac rising strongly from Wave (A) Bottom. This is only the start of the correction Up. But this post is more comodities oriented. 

Here are couple charts of Iron Ore and BHP ploted on top, where you can see that BHP Toped out when Iron Ore was $60. And a mania driven by herding behaviour later (where Ore tripled) didn't even had enough power  for BHP to surpass previous peak. That's the character of (B) Wave, when the underlying instrument lags perceived primary source of fuel for the rise.
  Iron Ore technicals points strongly that wave (3) has bottomed. I expect Wave (4) to go as high as 75, and BHP to 40-45 in it's (D) Wave of Triangle. 
 Though the corelation is not very tight between the two, but commodities overal should drift afloat/up due to the correcting US Dollar, which is in Wave (4)(not shown).  And as US Dollar is the primary barometer of Deflation forces in operation, it is pointing that the temporary relief has started. 

Corrections tend to last to the point where the sentiment shift occurs, so when we start to see media reporting  that we are "running out of oil" again, or "US Dollar will collapse soon" it would be over. Using Channeling Tehnique I project that final Wave in Iron Ore will commence next year and bottoms out the same year later +/- .
Based on the short term BHP structure, it is a Buy, but only if the last bottom of ~26 holds.


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## rimtas (30 May 2015)

I'll throw in the chart of US Dollar which is the primary cause of deflation in commodities.  Seeing that US Dollar will go up much further later, comodities markets are poised for more declines. 

At the moment, Wave (4) is in Progress, that could take the form of Triangle, producing a Quassi Fractal followed lesser degree fourth wave. This is the primary expectation, though other forms of correction variables can develop.







At the Top of Wave (3) back in Jan-Feb,  a 10-day average of a poll of currency traders (courtesy trade-futures.com) showed 93.7% dollar bulls, an all-time record high. Also, Large Speculators in futures and options, who are generally trend-followers, held an all-time record net-long position of 72,897 contracts, as shown on the chart below.  The extreme in these measures shows the strength of the rally but also reflects a trend that is ripe for a correction, which is unfolding right now.
 Wave (4) will be a multi-month pullback that alleviates the aforementioned sentiment extremes and sets up the dollar for another wave of advance, which drags comodities further down the road.


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## rimtas (1 June 2015)

WBC, NAB and XAO. Both banks have nice structures, rising in five and correcting in threes. XAO looks the best when applied the same count as WBC-it retraced 50% of the advance from the bottom and ended in wave iv area, where corrections usually tend to end.  Market can correct deeper, but if it does NAB can get hit with a technical damage, unless it holds above todays low resisting XAO further short term decline.

Today's crash most likely marked the bottom of wave (ii)(and lesser degree *ii* in NAB) . XAO even managed to advance in five later in the day, so a confidence towards further uptrend is high.  

If the third wave (iii) is about to launch, it is normal to shake out majority out of the trend before it does, as third waves at all degrees rise the best "on empty", not with everyone on bard.  The more people managed to get in at the bottom, the more series one's and two's market makes-like a sprinter ready to race but with some weight on his shoulders-shaking out few times  before a big jump


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## rimtas (2 June 2015)

Market tanked today, sending banks lower, but amazingly NAB managed to hold it's head above 33,23 yesterday's bottom, as expected.  Westpac just made another "three", declining in 7 waves, which is normal, the same with All Ords. If the next leg of advance is about to start, it should start soon, probably tomorrow. Otherwise short term expectations will change.
 As I write futures are at 5610, 0,7% lower than the All Ords closed today. Basicaly futures have to manage their way up through the night or we have a gap down tomorrow at open which could take out previous lows, making the move bearish.
I do not like to trade or analyse short term moves, but this is the opportunity, so I am watching it closely, especially when I sit on a pile of cash. 








By the way, Ending Diagonal in the DJIA looks complete, just it is short in time and the shape doesn't look very nice. It can be a part of even bigger ED, that could develop in the months to come, but ultimately  it should end with a crash. 
I see just one problem with it-in the opposite way to the previous ED, which was "silent" and little people saw it, this Ending Diagonal start to make a noise in the blogosphere.  It needs to appear in the Bloomberg or CNBC analysis and consider the pattern is killed. So be cautions about this one as a bearish pattern.







And for those bears out there-this one hasn't even run half way through:

(I'll have a comprehensive analysis on most Asian Indices later.)


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## rimtas (3 June 2015)

Both banks discused above at this stage have new lows, leaving previous advances as a correction.
 Until new Impulsive advance develops, situation short term becomes unclear and thus we need to wait for more waves that will resolve this.
This doesn't mean NAB will not rise as I discused, in fact, the patterns with new lows looks even more bullish than before.


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## rimtas (10 June 2015)

It's been a while  since my last post and I hoped that situation in All Ords would resolve itself by now, but it just kept on going. Each time XAO declined in 5's (short term), the rebound  was minimum, meaning a weak market. Even banks I follow(WBC and NAB) had very small corrections up, instead of unticipated multimonth rallies. 

Though momentum Indicators such as RSI shows divergences in XAO, but the declines in world markets and cracking DJIA Ending Diagonal with crashing Transports along with Utilities suggests that something else is unfolding.  

All Ords waves are mess since 2012. Both at Minor and Intermediate degree ( with a few exceptions) anyone can count a myriad bullish and bearish scenarios and try to apply guidelines as one wish.

But after browsing through many instruments I found one particular ETF that has produced excellent Wave Structures since 2009.
  The ASX 50 index ETF since 2012 bottom advanced clearly in 5 Waves. Also, this advance is Fibonacci related by 1,236 multiples of Wave since 2009.  And it ended at the upper Channel line. 
 Those are the guidelines of the corrective 5-3-5  retracement. 

Based on this it would be nice to see a 5 wave move down to confirm all the above I noted. It can be a simple Impulsive decline or Leading Diagonal(Expanding or Contracting), and it could find support somewhere below the middle channel line.  This would be an extremely bearish development, pointing for much lower prices later.

But If this 5 wave decline does not materializes this year and from current levels and  ASX50 jumps above the Uper Trendline (in this case above 60), I consider this a bullish development, which most likely carry SFY above 2007 highs.

Qverall,  the picture in SFY looks like a loud warning.


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## rimtas (10 June 2015)

The decline from wave 2 top to the current levels already looks like ending, as subdivisions finally start to take form of five. It could make a few squiggles down in the coming days, but the bottom of this decline is very close.

 The rally that starts from here would be important, as market sits on the three wave decline from the March top, making it corrective. If rally falls short, the most likely scenario is that the Point of Recognition is ahead, confirming a bearish scenario discussed yesterday-means a larger five wave decline is developing. 

 However, if prices manage to breach wave 2 top( as a Key level on the chart), most likely a Leading Diagonal would be at works, with its first wave already over at these levels. As always, wave subdivisions would be important for determining the highest probability scenario.

 I am getting bored already.


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## rimtas (11 June 2015)

Here is one good chart indicating that the entire Asian Pacific region sits at the crossroads. 
 It has excellent wave structure which is pointing  at the upcoming trigger that will determine the trend for the next few years. 
From 2008 bottom Index advanced in clear five, later after correction it just kept on going in overlapping manner, which at this stage can be considered as an Ending Diagonal, or series one's and two's.  

If the trend remains bullish, market should bounce back from the lower trend line again, but this time producing  big monthly bars (like in 2009-10), which would indicate that the strongest advance from 2009 lows has started as a third wave.

For a bearish case all we need to see is the break down of the trend line from 2008 low, leaving the entire structure as 5-3-5 and the retest of GFC lows will follow in the years to come.

And because now this index is sitting very close near the trendline mentioned, All Ords short term direction basically says the same thing. If market tanks below yesterdays lows (as per my chart in yesterdays post) producing Point Of Recognition-at the same time Asian Pacific Index will break the lower trendline.  So this is the event to look for in the coming month.


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## rimtas (16 June 2015)

Short term market is moving as expected-an Impulsive advance developed from a bottom. After the correction the next leg should carry prices higher towards a descending bearish line, where the bearish count would be either approved if prices find support here, o denied if prices break higher. 
Basicaly the entire 6 year advance from 2009 bottom will find a resolution at those levels, as the the next few weeks should determine the trend of the next few years, so the wave structure is very important here. I do not see a sideways movement that would last months, it's either sharp up or sharp down, in extreme manner.


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## rimtas (19 June 2015)

As market is getting closer to the descending resistance, the Target for possible Top can be seen in the 5640-5690 area, depending how sharp or slow/choppy the rally unfolds next week.
If the Trend will be set UP, prices should break  this resistance strongly and never look back, changing the labelling from a-b-c to 1-2-3.


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## rimtas (22 June 2015)

Below are Three main DOW Averages. If DOW30 has indeed sported an Ending Diagonal, it should basicaly start to decline within days(few more daily sideways bars doesn't change the picture).

 As one can see, Transports and Utilities already have enough series 1's and 2's and probabbilities of them to develop more of them are diminishing quickly. This means that either we see a sharp decline soon, or all three main averages will leave their structures as corrections with a potential to climb to new highs. 

Somehow I am thinking about Grexit that would fit here this week, potentialy creating the Point of Recognition move in the world markets. Or to put it simply-wave structures at the main indexes points to the Grexit. 
It remainds me of Sep 2008 when Lehman Brothers went under- next few days markets were even trading higher, but ultimately went into panic and Dow colapsed more than 3000 points within weeks.


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## rimtas (25 June 2015)

Market sees the descending Trendline Important-prices reached the level mentioned and started to decline. In Order to sustain a medium term rally, market must find support near 5500 level(in futures) and break upwards from the declining trend in the next few sessions.
 The Key level for futures is 5425, which if breached, confirms that All Ordinaries most likely started a Bear Wave wich has a potential to drag prices near/or below 2009 lows in the next 12 months.


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## rimtas (26 June 2015)

The chances to recover are vanishing quickly as futures fell down in five waves, basicaly meaning that new lows are ahead.


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## rimtas (26 June 2015)

Oil is going sideways/down, no clear indication of what is going on since the last EW update https://www.aussiestockforums.com/forums/showthread.php?t=15355&p=868933&viewfull=1#post868933 .

 But looking at the sentiment figures from TradeFutures.com OIL has managed to attract a whooping 83% bulls in just 6 months, from the record low of just 3%. There are no talks anymore about "oversupply", and those who see oil going lower say that it will go there till the end of the decade, but not now (Bloomberg, May 18: Goldman Sees Oil at $50 at the End of the Decade). 

Given the fact that oil has risen in three waves and the current futures traders bullish sentiment, oil most likely start to tank again, though I must admit that commodities from the start of 2015 entered a 2-3year positive cycle in a 20 year bear market that will last till 2030. This means that Oil has a potential if not to rally, but then at least go sideways within 45-60 area and not fall to new lows within that period. 
I would love to see cheaper prices at the pump, as now petrol costs almost the same as when OIL was $100.


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## Smurf1976 (27 June 2015)

From a fundamental perspective, the idea that the oil price drops significantly from present levels or even remains constant raises some interesting points about physical supply and demand.

See chart here: http://www.euanmearns.com/wp-content/uploads/2014/01/C+C_detail_jul13.png

In short:

Conventional crude oil (what most people think of when you say "oil") and condensate (light oil that comes up out of the ground with natural gas) has been flat for a decade despite huge variation in price over that time. Production didn't increase when the price went up, and thus far it hasn't dropped in response to the price fall. It's flat, with a few bumps in a fairly narrow band. 

Next comes Canadian tar sands. That's more of a mining and processing operation in physical terms than an "oil field". A key point there is that one built, a processing plant and mine runs at a constant rate (apart from maintenance outages etc) throughout its life. It doesn't have the peak and slow decline that a conventional oil field does, it's more akin to how a factory or power station operates - pretty much constant until it eventually closes.

Then there's US Shale, and that's been the only real source of growth in recent times. This one is interesting since there are plenty of reports emerging that with the price falls that growth is slowing and perhaps even reversing. The rig count has dropped and in due course production follows. 

Take out Canadian tar sands and US shale and we'd have had zero growth in oil production for the past decade globally. Some countries up yes, others down, but flat overall. Now, if the price is going to stay low then it ceases to be viable to keep growing production from these two sources, indeed there have already been plenty of projects scrapped. That's the end of oil supply growth unless someone else has come up with something and is about to put it into production cheaply (but who and what?).

The big question is what other underlying factors would be present if this low oil price, flat (or declining) production environment eventuates? Demand for petrol etc drops due to technological change (electric cars etc) so we just don't need as much oil anymore? *Or is it that the economy falls in a heap and kills consumption?* That's a rather big question if we're actually going to see oil stay cheap.


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## rimtas (28 June 2015)

Smurf1976 said:


> *Or is it that the economy falls in a heap and kills consumption?*




This is the best explanation/anticipation related to demand for commodities. Worldwide economic recession/depression would kill demand for everything-commodities, stocks, houses, cars and other goods. There are studies made (in relation to market cycles) that first signs/ recognition seen by broader population that the economies are in severe state will be just a year from now-mid 2016, and the bottom of economic depression sits in a 2021-2023y range.  
If markets made their respective Tops in April this year, they should fall right till mid 2016, marking first leg of the decline. Then a relief rally into mid/late 2017 follows and after this the biggest drop in history till 2022 occurs, where the long term bottom would be set. That's a rough calculation of course, nothing is written on a stone, but it would be interesting to where the markets will be in just 12 months time.


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## rimtas (29 June 2015)

New lows today increases chances that market is very close to Point of Recognition area. Today we saw 377 stocks rose while 1.222 declined(according to TheBull.com.au), meaning that the breath was 1:4.  For a Point of Recognition it is still too low, meaning that this is only an early stages of it. 

 When market produces 1:8 or 1:9 ratio between advancers/decliners, it will mean that the middle stage of the decline is upon us. Usually it is  a big down day( or few), with "gap and go"(down) movement. 

Today radio ant TV announced about the stock market "crash". It is not very common for non-business News have a comment on stock market, and I almost never heard it on radio entertainment channel. This only adds confidence about the fact that public starts to be aware about the direction of the trend. 

I have no chart today as All Ords Waves from April Top are overlapping and this needs to be resolved by time in  order to give and idea how much more market will drop before a sizeable correction (up) develops. 
But I am looking forward to see the Point of Recognition drop, as it will be a view to behold, especially when  sitting on cash.


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## rimtas (30 June 2015)

Asia Pacific short term chart-Two months decline produced clear looking Impulse wave from the Top.  It can be labeled as series first and second waves as well, but the bottom line is that this devlopment is bearish, and looking at the long term charts it is extremly bearish.  
So either the multiweek rebound develops from here and later markets plunge in a crash, or they will crash right from here. 








 In the longer term Asia Pacific chart here https://www.aussiestockforums.com/forums/showthread.php?t=15355&p=871723&viewfull=1#post871723  one can see the  paralel trendlines. Today, prices are trading below the lower one, and this development also adds more evidence that the downtrend in the region has started. The short term bounce that could develop in the coming weeks, most likely retest  the trendline, as this is the classic market behaviour  before the next leg of decline, they call it "kiss and goodbye".


Based on the decline in Asia Pacific chart, I applied the same count to All Ords, or more precisely-on ASX 50 fund SFY , which, as I discused earlier, indicates much more better wave structures than XAO on a Daily chart. XAO has overlaping waves and there is no way to label it like SFY, so on the same chart I added a bearish count, which portends a crash . 






In a bullish case market must start to rise tomorrow, and should develop a multiweek correction to the area marked in yellow. Why tommorow? Because futures declined in five waves, thus if correction up starts , it should start from here. Just I cant see any small "five up" yet from the bottom that could give us an early indication.


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## rimtas (1 July 2015)

One important measure of sentiment shift can be found in German Bond market.
Last month's "screeching U-turn on bonds"  represents another delicate financial bubble that may have just found its pin. Notice, for example, the technical damage that pervades this chart of 8-10 year German bund futures, as prices have plummeted through the lower boundary of a 20-month trend channel.






Also, observe the quick switch in sentiment among bund futures traders. As the market sold off, the Daily Sentiment Index (trade-futures.com) broke away decisively from a long string of plus-90% bullish readings that persisted throughout 2014. It's one of the most dramatic U-turns I have ever seen, and it's the kind of light-bulb moment that frequently occurs at major market turns. With reversals well under way in Europe's weakest borrowers (Portugal, Italy, Greece and Spain), the about-face in the almighty German bund suggests that the credit crunch is now proceeding with a much broader agenda. It should be the start of a long-term trend toward rising borrowing costs.


 The swiftness of the bund breakdown generated an equally strong reaction to Mario Draghi's â‚¬1 trillion quantitative easing program. "It's as though QE disappeared," said one company CIO, who oversees â‚¬197 billion of fixed-income assets (WSJ, 5/7/15) "In one week we had a total unwinding of all QE-related trades." It's exactly the kind of psychological shift, saying that investors would soon view QE as the "worst policy blunder ever initiated by a modern central bank." 
Up until now, most pundits believed that a major bond sell-off would be impossible, given the ECB's â‚¬60 billion-per-month backstop. The awakening has been particularly rude, as the Wall Street Journal reports that about â‚¬344 billion was wiped off the value of eurozone-government bonds. For most European bond funds, all of the gains made so far in 2015 were erased in a matter of weeks.

Still, this is the beginning, not the end, of a  trend that will see rising interest rates wreak havoc on Europe's debt-dependent economy. There are many dangers posed by the asset bubbles that have formed in real estate, high-yield debt, British IPOs and bank stocks. But no matter how many bubbles one can identify, the credit bubble underpins all of them. In other words, once credit begins to contract, the air will leak out of numerous inflated assets, most of which investors are now only dimly aware of.


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## rimtas (3 July 2015)

There is  a 7 year Cycle between Tops operating since 1973.  It has a left or right hand translation with an  amplitude lasting approx  +/-6 months.  All bottoms that occurred after were early within the Cycle, usually in the first 20 months, with the exception of 1987 crash.

Most recent April 2015 top occurred exactly within the boundaries of the operating Cycle, marked declined Impulsively from the top confirming reversal.  
If the same dynamics continues, we can expect the bottom to occur somewhere in the mid 2016, regardless of the extent of the decline.


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## gartley (6 July 2015)

rimtas said:


> If the same dynamics continues, we can expect the bottom to occur somewhere in the mid 2016, regardless of the extent of the decline.
> 
> View attachment 63269




A bottom in an uptrend or a downtrend???)))))


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## rimtas (6 July 2015)

Gartley, bottoms do not occur in uptrend, only tops. In order for something to reach a bottom it must fall first, right? 

In the chart above only the date of the bottom is indicated. The price level can be any, but if this cycle pattern is still operational, it suggests that any rise in prices will only be a dead cat bounce with new lows to follow.  Of cource, Cycles are good only as far as they go and there is no way of knowing when they start  or end. I would say if All Ords rises from here above 6000, consider this Cycle ended and is no longer operational.


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## rimtas (6 July 2015)

Short term market will most likely rally to 5650 area or higher, sporting a first 'Three' of the sequence of corrective patterns that should ultimately develop into the second (2) Wave. 

Today market breath was not so negative as the closing price suggests, as for every 2 stocks that fell there was 1 that has been rising, overall giving a 2:1 breath ratio, indicating low selling pressure and increasing optimizm.
5428 level in All Ords Cash index is a key level for the scenario to play out, but probabilities for the rebound are higher here despite the Greece scare, which, to my opinion, has nothing to do with the future market action.


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## gartley (6 July 2015)

rimtas said:


> Gartley, bottoms do not occur in uptrend, only tops. In order for something to reach a bottom it must fall first, right?




Depends what degree of trend we are talking about


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## rimtas (10 July 2015)

Because market took more time to correct the advance from the wave (1) Bottom of 5323(in futures) I adjusted expectations accordingly. 
Cash index even managed to reach new lows, negating the structure and labelling, but as futures and SFY(EW indicator) were trading in accordance to expectations, I assume the best labelling would be that All Ords will sport a sharp Wave (2), retracing 61,8% or more ( towards ~5800 level in futures). Most likely banks and WOW will lead the market higher.
If market can not realize a sizeable countertrend push up now, it means weakness and the crash directly from current levels is inevitable. 

But just monitoring the environment one can notice a widespread bearish consensus, which inflects the words "china share crash", "Bubble" and "iron ore crash" widely and intensively, meaning that some point of fear extreme has been reached and market needs to take a breath and accumulate more energy before another leg of decline, wich later will carry prices into 2012y territory. So expect a rally now, but be prepared to unload at any time, as corrective market mood is hard to forecast and wave structure keeps changing constantly..


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## rimtas (18 July 2015)

Last week cleared the fear out of the markets, as Greeks were “saved” and Chinese government manipulations “worked”. But what appears to be a new rally, in reality is only a countertrend push, as Shanghai Composite and Asia Pacific charts suggests.

Both crashed in five waves down, with fifth waves extended. This means a new trend towards much lower levels. But in the meantime, a countertrend rally that is already about half way through, is taking place. Usually a correction retraces entire fifth wave when it is extended, or terminates near the peak of its second wave. These areas are 4350 and 4750  in Shanghai Composite and 480-490 in Asia Pacific Index, which means about -/+10% more to go.
All Ordinaries are no different, just the wave structure is more complex, suggesting that a 4 month decline is a Leading Diagonal, with each subdivisions consisting of threes. A confirmation that decline was Impulsive can be seen in the entire Financial sector, with CBA having a clearest Down structure as a Five. A countertrend push that is developing right now can take few paths and end somewhere at ~ 5800 in ASX Futures and $90-94 in CBA.   

I expect to see all of the below shown charts to be aligned for the next leg of decline almost at the same time, with rally ending suddenly and abruptly, resulting in a violent down move, which should come as a surprise to most of the people. Good news in bear markets usually mark the tops of the countertrend  moves, so It is worth looking for any  announcements that at the first glance would seem as a “catalyst” for further advance, but in reality it will be the opposite.


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## rimtas (21 July 2015)

The last subdivisions of wave c (circled) remains in progress. Today the entire advance from the 29th June bottom retraced 50% of the decline. 
If rally extends further in to fifth wave (v) of c (circled), it can carry to 61,8% retracement level of 5750.  

The entire three wave pattern looks a bit short in time, so I expect that the decline which starts just days from now(if not tomorrow), will develop into a corrective manner, leaving some space for another "three" later to 5800 or higher, as Wave Y(as indicated in my previous post).  
But at the same time I am not ruling out that Wave (2) Top can be just few small subdivisions away and market just collapses in a third wave,  carrying prices below 5000 over time. 

Decline in an Impulsive manner below 5600 will confirm that Wave c(circled ) is over and short term trend will be down from there. Whether  it develops into and Impulse or into a correction is to be seen. Good time to sell.


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## rimtas (22 July 2015)

The top discused yesterday was confirmed today, with market falling down through 5600 support.
Though the decline erased 1,5% of gains, the internals were quite strong, with 540 stocks rising and only 804 falling, leaving the breadth ratio close to 1:1,5, which suggests that the move is not the Kick-off of Wave (3)(as per alternate). 

This can change at any time, but the main scenario I am looking at is that market should fall in three waves(in any form, shape and size but not lower than 5324 in futures), generating a corrective move, after which another three wave rise above 5668 (in futures)begins. 

But If Wave (3) has indeed started, it's initial Impulsive wave should produce a Kick-off move straight to 5300, creating short term  deeply oversold condition, which usually won't be reversed. 

So again-the way waves unfold will determine what to expect next, but this is not the buying opportunity.


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## rimtas (24 July 2015)

With bearish views already crystalized, aussie dollar has no where to go but up. This picture and article that follows (msn.com.au)would have did quite good if it were posted in 2011 when dollar was trading at 1,1, but now it just shows a conviction of the trend, which is poised for  rebound. That's classic.


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## rimtas (26 July 2015)

As WTI Oil is heading to new lows, there are quite good short term trading opportunities allong the way. DSI shows that market is overcrowded right now which most likely marks the bottom of 3 wave and a rebound is likely. 
Medium term Large Specs still holding almost half of their positions of what they had in 2014, so when they start to unload, a blow-off move to new lows should materializes. Commercials keeps accumulating, which is a buy longer term, but best buy will be only below Mar 2015 bottom.


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## gartley (27 July 2015)

rimtas said:


> With bearish views already crystalized, aussie dollar has no where to go but up. This picture and article that follows (msn.com.au)would have did quite good if it were posted in 2011 when dollar was trading at 1,1, but now it just shows a conviction of the trend, which is poised for  rebound. That's classic.
> 
> 
> View attachment 63576




Not Yet. More likely by years end


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## rimtas (27 July 2015)

gartley; said:
			
		

> Not Yet. More likely by years end




Of course not at the moment when post was made. This development covers more than 4 years decline, and media panic nicely captures the extreeme of bearish view.
 Few more subdivisions remain, I would say just below 0.7, time will be determined later as waves make a terminal pattern, probably few months from now. Declining US Dollar and bottom in commodities most likely will be the main factor for the AUD rise.


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## gartley (28 July 2015)

An interesting observation. Looking at the monthly chart below. Point A which was April 2001 low to point B low in Oct 2008 which was the 89 Fibonacci months long. From point B to point C high in July 2011 was 34 Fibonacci months. From C to now we arenow  50 months along. IF the downtrend continues till years end it will be 55 fibonnacci months. 34/55 = 0.618 the golden ratio and may an important time factor. At the same time the 89 fibonnacci time cycle will be reached. So it maybe an important period.


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## rimtas (28 July 2015)

Nice math Gartley. Throw in that trendline and media panic and you have a recipe for reversal from ~0.7. Sometimes too much evidence points to one moment which can't be ignored. AUD is super bullish at this stage.


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## rimtas (28 July 2015)

Waves look quite good for another rally to start in XAO. 
I am not sure whether it is worth to trade this setup as risk is above average, but I will be looking at ANZ this time as it has one wave missing to above $34. What it needs now is to sport small five from the bottom of 31,70, and then entry point could be seen. Or it will decline to 31 and only then rally, matching the alt scenario in gray line per below chart. Corrections are tough, but even here small waves can be forecasted and traded with a right approach.


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## gartley (29 July 2015)

rimtas said:


> Nice math Gartley. Throw in that trendline and media panic and you have a recipe for reversal from ~0.7. Sometimes too much evidence points to one moment which can't be ignored. AUD is super bullish at this stage.




Agreed Rimtas, yes super bullish and the cover of the Guardian can't be ignored as measure of sentiment. It's very important for the contrarian trade and usually lines up nicely with developing terminal wave patterns.
It may not be effective for trade timing so much, but at least it emphasizes that sentiment is at extreme levels and further ahead there is an impending trend change.
The math I threw in is no certainty, but it's just something to think about. I like to operate with an IF/THEN mentality. No one can predict the future, but IF the market reaches a certain level at a certain time, THEN we can be in a position to take a trade with higher probability. Ofcourse it's nice to have sentiment, EW and time factor relationships showing confluence


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## rimtas (29 July 2015)

Yes Gartley, agrree with you. 
I also found that the AUD bottom if it occurs at year's end, could easily be at the same time when gold and oil bottoms occurs. If you see the patterns in those two, you know what I mean-both gold and oil almost have a nice terminal patterns from 2011 highs, probaly a few year countertrend rally in those, as well as in AUD begins. I expect AUD to reach 0.9, gold 1500, Oil-70-90. 

Not sure what it means for stocks though, but usually rising AUD is bullish.  And given the 7 year equity cycle(chart is in previous page of this topic), Stocks should bottom in the early/mid 2016. So a lot of thigs are pointing that one should  keep tons of cash as next year posibilities for buyers would be just great. And Elliot Wave model in stocks right now predicts that a next leg of decline is on the horizon-as soon as this correction  is over, market should tank, not sure how deep, but C or Third waves ussually counts  good so there would be no big issue to pin point a bottom. Media should help also, by issuing few bearish statements that Australia is going to recession(again) and realestate is poised for a bust. Would be nice to see WES trading below 20  and CBA below 60 till this time. Patience is key, good moments for entry are rare, but worthy.


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## rimtas (29 July 2015)

Following AUD topic it just came to mind that the bottom in AUD which should occur late 2015-early 2016 could mark not only the bottom in commodities such as gold and oil, but energy stocks as well. I am thinking about BHP.

My most recent timing on BHP was very poor, but now as new probability factors came to light, it might  support the case that BHP will finally make it's bottom of Wave (C) of the larger Triangle by subdividing further into only two smaller waves remaining, which should last till year's end and cut the price below $25. If A would be equal C, then the $20 bottom should be the best point. 
If lower than this below 2008 bottom , then the entire big Triangle  scenario disintegrates, but I consider this low probability due to the already prolonged bearish situation all across mining and commodities sector.  I hope I will be able to pin point a bottom and successfully enter this trade, which theoretically should generate almost +100% to the upside from $20ish bottom(if such occurs). So one more wave development saying that before market enters into multimonth/multiyear rally it should tank at least -20% first.


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## gartley (30 July 2015)

Rimtas. Not sure what a low in the AUS means for stocks either.

But I agree with you totally that a low in the AUDUSD in DEC/JAN if it happens will most likely coincide likewise with a bottom in precious metals and oil. If this is the case the fallout of a stock decline on Wall Street may not be as bad here and may affect mainly banks. However our index is so heavily weighted by banks who knows.

I have attached a long term chart for Gold. My apologies for the lack of detail in the EW annotations as the platform I use is not so user friendly in that department. But we can see we have confluence of the 61.8 retracement of red 
	

		
			
		

		
	



	

		
			
		

		
	
wave 3 and the extension of the first leg of the correction at around 890-910 level. This further coincides with the span of the previous wave 4 of one less degree within red wave 3 and also the previous structure of the 1980 high all in the same price area so I figure this is the most logical place to be looking for an upcoming low.

This is almost an overlap of red wave 1 but as an EW guideline overlap is acceptable in commodities


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## gartley (30 July 2015)

Rimtas,  I have attached the following cycles analysis and they seem to gel with your EW counts.

Price should find resistance at the 3rd upper band if we are correct at about 5800


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## rimtas (30 July 2015)

I a bit disagree with your wiev re gold. Long term chart clearly indicates that the rise from 2001 till 2011 is indeed a terminal wave of the larger pattern, and thus this decline from 2011, which is a clear five, is just the first leg. Gold should never see new ATH within decades and for some of us who is over 50, the $1900 top would never be breached in our lifetimes. But $200-500 level is real, as prices tend to correct to previous fourth wave area. 






So back to shorter time frames- a five wave decline is approaching it's bottom and the corrective rally towards 1500 should develop in the years to come. Given the size of the decline from 2011 top (in relation to long term prices), whish is quite small,  I think it is not wrong to anticipate that this is just the first wave, not A. 
Decades and decades of downtrend ahead in precious metals. But short term I would buy it as much as I can as soon as it breaches down 1000 mark. Riding a countertrend moves can be tough, but downtrend from 2011 is almost over, as we both anticipate, bottom could be somewhere into year end.


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## gartley (30 July 2015)

Put 10 Ellioticians in a room with the same chart and you will get 10 different answers!!!

Who is right I don't know. But to be honest I gave up using long term log charts with EW ages ago when I saw Prechter predicting the end of the supercycle bull market in 1987 with a log chart going back to the 1800's and he has been wrong over and over and still is to this day like a broken record. It doesn't work....

Irrespective of the wave count BS hopefully we will see some sort of low years end))


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## rimtas (30 July 2015)

As far as I can see I  find most elliotticians sitting on the same counts. The ones who not usually use not EW but something different-they counts constantly ignore the wave formation principles. So I don't know where you found that say about 10 ellioticians in one room. 


Long term charts are good when they are clear, like in gold. DOW chart from 1700's is not clear, that's why Prechter is biting a bullet. The only section of DOW which is clear is the rise from 1934 Great Depression bottom till now. At this point I must agree that some sort of a DOW Top is at hand, but whether it is a Grand Supercycle I leave it to Prechter's wild imagination. We never know what kind of top is it because there is simply no data. Having 1000 years of stock data would be much simpler.
But apart from this, every country have it's own path. Have a possibility in mind, but trade what you see. Just compare Greece and Indian charts and you can see what I have in mind.


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## rimtas (21 August 2015)

The ongoing decline is already too big to be a part of the wave that started from 2011 low, thus confirming the Top is in and the bear wave is in progress.  There are two scenarios what is going on, but both of them should produce a bottom in mid 2016 as the 7+ year operating Cycle suggests. 

Under the Bullish scenario, the decline should sport three waves, ideally within the ascending Channel which suggests the Bottom of wave (2) somewhere in 4500’s about 10 months from now. The corrective/choppy market dynamics will confirm this view and many other instruments should produce a divergences and non-confirmations of the decline, bottoming one after another somewhere in 2016 (Oil, Metals, AUD/usd )





Bearish case is much simpler-Wave c should carry prices below 2009 lows. Because wave c is a third wave, it will have the character of the third wave, meaning that decline will be steep/fast/ and scary for anyone who is long.  I expect the first stage of wave c should bottom in 2016 somewhere in 3000-4000 range, then a year long rally should restore some confidence and after, the decline will resume wiping out all of the optimism that accumulated during a 150year long uptrend, bringing down the bubbly realestate and overborowed consumers down along the way. 
The ideal bottom for Wave c  would be 1.618 times of wave a, at 2100, but technicals are pointing at much lower levels, with 1000 level being a more likely target, wich should be reached somewhere in the year 2021-2023 as the longer term cycles suggests. 
Please note that in the past 150 years there were no corrections that lasted much more than 5 years, so this decline from 2007 Top is already 8 years long pointing that the winning streak is over and market could correct the entire 150year advance, meaning that 1000-2000 ASX Target is normal, as market is a fractal.










Short term it is worth to look at Asia-Pacific  chart which shows clearly that a crash is unfolding. I must note that Taiwan and Hong-Kong are the main drivers of this decline and when Shanghai Composite enters into the third wave it should accelerate even more.
All Ords matches the Asia-Pacific count to some extent so looking at both can give a good indication of short term countertrend moves that can be traded from the long side. In bear waves, countertrend moves are very violent and if applying right management techniques can bring big gains in a short amount of time. 








But most of the people should stay away from the market at least for the next 10 months. 
I’ve read some views that dividend yield is now more than 6% and should look attractive to inspire to snap “bargains”, but they forgot that that in 2011 banks yielded over 10% and no one wanted them. Psychology is the main driver of market prices, which is quite different if compared then and now.


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## rimtas (22 August 2015)

Please note that futures  Friday in aftermarket dropped another 2% and technically price has broken the lower channel line of wave (1) by a slight margin. This development usually occurs when market enters into the Point of Recognition stage, which marks the centre, or the heart of the bigger wave.
 We need to wait what Monday brings, but the cash index "gap and go"(down) dynamics would confirm that strongest part of the decline started. It should produce a 90% down breadth across the board, marking that psychology shifted completely from bargain hunting to seeing assets as highly overpriced. There should be big bullish hopes towards the bottom expressed on financial press/media channels, which are a common trait of psychology in this stage that fuels the decline even further. 

If Point of Recognition will happen soon, we should see market at around 4600 within 3-4 weeks.  Any rebound and close significantly higher would be unusual for this market stage, which should be a "gap and go", persistent selloff. So I'll monitor it closely, maybe some stocks at the end of it will offer an opportunity for a "quick and dirty" trade.   Note that I never suggest the exit point, only entry. Exit is determined upon everyone's greed level individually. 


By the way, US stocks lost ground significantly, too. As well as European markets. This means that there are no reason to look for reason, so to speak. It is just herding. Selling because everybody is selling. The same as in uptrend.


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## gartley (23 August 2015)

I think we may fall to about 4800,  then get a sharp bounce/rally into September and thereafter the plint of recognition may take hold.


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## rimtas (23 August 2015)

Well, if this happens, this means that market chose to go down through series of first and second waves, instead of a normal decline like I indicated in the previous post. Both possibilities are equal, but the result will be very much different.  Series first and second waves usually indicates a bigger crash with an extended third wave. We will see this soon.
 One who sits on cash have plenty of time and cold nerves to watch developments with clear mind. I personally see the upcoming events as a massive opportunity for those who have no debt, no shares and no any other commitments.  For the rest it will be just pain.


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## rimtas (24 August 2015)

Market action and internals all confirming that today was a Point of Recognition Day, not the capitulation bottom as some pundits suggests. During Point of Recognition(either direction) market is focused to the direction of the trend at around 90%. 

Market stats today were as follows: 5,51% advancing issues and 89,19% declining(from Business Day). Wave structures on the major world indexes, channeling techniques and already oversold oscillators also confirms this view.  
Decline is usually fuelled by Hope, and Today's Motley Fool Headline shows that the hope is indeed very alive:








Interestingly, many stocks, including TLS, SUN ad even the entire Real estate sector, only Today broke down through Wave (1) bottom, which means that Wave (3) just barely started.


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## gartley (25 August 2015)

rimtas said:


> Well, if this happens, this means that market chose to go down through series of first and second waves, instead of a normal decline like I indicated in the previous post. Both possibilities are equal, but the result will be very much different.  Series first and second waves usually indicates a bigger crash with an extended third wave. We will see this soon.
> One who sits on cash have plenty of time and cold nerves to watch developments with clear mind. I personally see the upcoming events as a massive opportunity for those who have no debt, no shares and no any other commitments.  For the rest it will be just pain.




Well Rimtas today we reached  4800 the lower  band of the cycles target.  Prices at least in the short  term have reached  an extreme a sharp rally should start. May last into September and then the next down will start.

Negative news ever where supports this. When the media catches on we know are near a low for now anyway.


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## rimtas (25 August 2015)

I do not expect this rally to last so long. Rebounds in bear markets usually last just a few days, and to gain say +10% is normal. Anyone who thinks that such big intraday moves(up) are the start of a new bull trend will be very disappointed, as the decline that follows retraces back even faster.   

I am not sure about short term subdivisions, but the current bounce definitely is a part of series first and second waves. It just offers the opportunity to unload at still good prices. As I mentioned series first and second waves sequence usually occurs when wave is extended, so the more these bounces occurs along the way, the more extended wave down will be. It already reached levels which I expected only to be reached few months from now if this is a correction in bull market.  So more and more evidence that April 2015 top is permanent. 

Nevertheless, one stock though still has a bullish potential, it is probably the last stock that I can see a trend change. Waves look good with one more last push down to complete the sequence and then a massive multimonth rally should start. The key level for this count to be in effect is Nov 2008 bottom of $19.98. If breached at least a few cents, the count becomes extremely bearish, pointing to single digits. So last hope for bulls still remains. 








As it comes to banks, the best interpretation can be found at the smaller ones, like Bendigo. The structure clearly shows that the series of first and second waves are unfolding, with smaller Point of Recognition of Wave 1 already behind.  It looks of course like an ABC decline at this stage, so another wave down will clear the picture for good.


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## rimtas (25 August 2015)

If looking at All Ords Cash index, one can clearly see that one more wave to the bottom is missing, as short term subdivision suggests. Yesterday's strongest wave was Point of Recognition, so clearly it is a third and fourth is taking shape today. 
 Maybe this bounce today is over already, or market will offer one more pop in the next day('s) and tank towards 4750 levels. If this happens, I update chart and most likely it will be an amazing opportunity for a trade in some stocks.  I see big4 and TLS are in similar positions so maybe sweet spot will be there, we'll see when subdivisions are on the table, now it is a bit too early. I usually follow futures, but at this stage cash is offering clearer picture.


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## gartley (25 August 2015)

Every moment in the markets is unique. Although the wave principle is a very useful guide quite often there is more than one possible wave count. Knowing which is the highest probability wave count is the key to applying EW successfully. 
The ideal situation and highest probality would be to have both your prime and alternative wave counts suggesting the same direction.
How do you know Rimtas you are dealing with the highest probability wave count?

The originator of this thread  was waiting for major wave 4 to finish and then wave 5 to start in March of 2009.
It NEVER happened because he did not consider the alternates.
He was waiting for the market to fall off a cliff after it had already done do following EW


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## PinguPingu (27 August 2015)

Some big demand days recently and today is looking strong. Rimtas, any change to your count?


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## rimtas (27 August 2015)

gartley said:


> How do you know Rimtas you are dealing with the highest probability wave count?





It is simple-when I know that the count has highest possible probability, I put my money on it.  As you mentioned, market sometimes arrives at the stage where there are little or none alternatives. These moments are rare, but they are the times that one must act. 
I do not trade every chart that I present here. 

I would highly appreciate if you could stop digging further about the reliability of the method I use and instead focus on market analysis.  All These talks about what is "working" and what's not  are useless.  This thread is about forecasting and practical application using EW, so if you don't have any ideas, please leave it to me, as I have plenty.  One thought that just came to mind I will post in the next post. Thanks.


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## shouldaindex (27 August 2015)

Is wave 5 likely to happen on the XAO?


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## rimtas (27 August 2015)

PinguPingu said:


> Rimtas, any change to your count?




Yes, of course. For the previous count to be in effect, All Ords Cash must not overlap with wave 1, which low  is at 5311,5. But I am dropping this count in the bin, because futures already has an overlap.  I have a number of alternatives here available, but it is not worth to get into detallization of small wave subdivisions, because they do not offer the trade at this stage. 

If market keeps on rising, it will leave the decline from wave (2) Top in three waves, both Cash and Futures index. This means that higher degree count changes as well, invalidating Wave (1) and (2) labelling that was in effect past few months. I need a few more days to confirm the next probable future path that market is presenting here. 


 Please note that when decline started, all major world indexes started to move in sync again-a common trait of bear wave. This gives us an ability to see a picture more clearly by not limiting ourselves just with All Ords. I have no doubt that ALL impulsive waves Down in All indexes will be at the same time, so one can use any major index and link it to All Ords. 
I found one Index which has  textbook subdivisions from it's ATH Top. It's Russell 2000, it consists of major 2000 US Stocks, so it reflects herding psychology and thus waves, more clearly. (there is a Wilshire with 5000 stocks, but my platform doesn't provide data on it)

Looking at this chart one can clearly see the textbook EW subdivisions of each motive and corrective wave, and it is hard to see this decline as complete. 
So from here I see two options-stocks are working sentiment back in (4) wave, and then (5) to new lows. This scenario feels a bit less likely due to quite short third wave if compared to Leading Diagonal that portended it. 

Another scenario is that the last steep drop is only the first wave of (3), so the rebound can go higher and last longer.


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## rimtas (28 August 2015)

Market advanced in three waves from the crash bottom and at this stage it looks best as a correction. But as I explained in previous post, this wave can't qualify  as a fourth wave, due to overlap in futures chart. Cash index doesn't has one, but I am going with  series  first and second waves count.  This implies that starting on monday market will enter into a new colapse stage, even steeper than the one we had already.

The key level to this forecast is 5293 in futures and amazingly-the same 5293 level in cash. If it is breached, I am already looking at changing Intermediate degree count where only Wave (1) has just bottomed and Wave (2) is underway. This would give a good oportunity to enter into long term position on such instruments like BEAR and similar.  Also, this would be the last chance to sell every single investment asset that anyone holds, be it stocks, realestate or artworks of any kind. Later buyers just dissapear. Bull waves, that take weeks and months to build, are erased in minutes and hours in bear markets. 

So short term market sported three waves up, take any blue chip stok-all has the same structures. And it best looks as a second wave. Russell 2000 index also has a nice Wave C completed at 115.
 Who knws, maybe most Mondays from now will be "black". This was true in 2008-09 with fridays.


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## rimtas (1 September 2015)

You've seen the stunning price volatility in stocks and other instruments the past few weeks. The VIX chart for US market puts the massive moves in perspective. 
This chart of the 5-day percentage change in the CBOE Volatility Index (VIX) shows the explosiveness of previous Monday's range, as the percentage change shot to a record extreme for the index's 25-year history. 





This record change can be explained only in one way-it is the kick-off move indicating that the large wave is starting. Corrections don't produce such spikes, only motives waves.

In All Ords this translates and adds more evidence that Wave* c* is starting, which should end somewhere below 3000. I am looking for more signs to confirm this trend. 

Because it is should be "out  of ordinary" in terms of scale, percentage decline and time taken to develop, at the start it should provide more evidence, like record decline in DSI, spike in ROC , call/putt ratio and nice bigger scale structure at weekly time frame. Decline below 2012 low of 3900 would confirm the trend, but it would be too late to act, so understanding now what can develop from here is vital.


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## kid hustlr (1 September 2015)

I think Elliot wave has a lot to offer but sometimes when I see predictions of this nature I wonder if there should not be a bit of a 'reality check' or a realistic test thrown in.

I mean calling the XAO sub 2000 is a pretty drastic move.

The GFC was a huge event in which an enormous amount of wealth changed hands - most likely an economic event not to matched for a *very long time.

From a trading and an investing perspective are you really waiting until the XAO hits 2000 before you would consider buying stocks?*


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## Porper (1 September 2015)

kid hustlr said:


> I think Elliot wave has a lot to offer but sometimes when I see predictions of this nature I wonder if there should not be a bit of a 'reality check' or a realistic test thrown in.
> 
> I mean calling the XAO sub 2000 is a pretty drastic move.
> 
> ...



*

This is the trouble with Elliotticians, they get a bee in their bonnet and don't let go. Prechter from Elliott Wave International has been talking about Armageddon for over a decade to my knowledge. You have to know when you are wrong and move to the next most likely count (alternate count).

I don't normally read Rimtas's posts but your response made me take a look. His chart of the VIX is from Elliott Wave International, sent today. He removed the copyright so I will repost it...only fair.

As for the XAO...a deeper retracement is now looking likely. Next target 4527 - 4188. Assuming support is breached.*


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## rimtas (1 September 2015)

kid hustlr said:


> From a trading and an investing perspective are you really waiting until the XAO hits 2000 before you would consider buying stocks?




No, I will start buyng them as soon as I see the trend change, at any degree, at any level. Making a forecast and trading is two different things.


Porper, yes, from time to time I use EWI free material and repost it here. I also read Teorist and some other stuff, they have really good stuff that is not available for free to everyone. But due to the rules I can't post this paid material until  after 3 months passed from its release.   DSI numbers alone cost over 1000 bucks for 6 months subscription.


By the way, Porper, It would be nice to see some bullish count from you interpreting current Intermediate degree situation, I missed them very much.  Thanks.


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## rimtas (1 September 2015)

kid hustlr said:


> I wonder if there should not be a bit of a 'reality check' or a realistic test thrown in.




What do you mean by that? That reality check should be bullish?  Sorry, I maybe misunderstood you. 

Realistic test also sounds interesting, you can shed some light on that as well.


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## rimtas (1 September 2015)

A few more blue chip charts that are backing up All Ords decline below 2009 lows. The clearest looks banks, with ANZ, CBA and WBC most likely in expandet flat corrections, smaller banks like BEN looks like 5-3-5 corections developing, reatailers like WES probably will stop near 2009 lows.

 BHP if drops below 20, long Wave C to single digits. Realestate charts very similar(not shown). 
Nice structures for any eliotician. Denying these probabilities will ruin lives of those who refuse to see them as a fractal nature of markets(if they materializes) .

 Wave *c* is a Third Wave, so it should be a Crash, from start to finish, in a thin Channel, with relatively small upward corrections. When the bottom is reached, fundamentals and economy will collapse in response, providing grounds for the same linear thinking for everyone like today, just in different direction.

Now I should wait and see how this will play out. If this forecast was just on an hourly chart, probably few days would be enough, but in this case a year or a few is in the cards. 
 I've also attached EWI chart from June Teorist that shows how extreme situation is now, that can only be resolved with a crash.

I will not be posting short term forecasts anymore.


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## shouldaindex (1 September 2015)

Very interesting last graphic, the triple extreme.

Either going to be very right or wrong!


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## kid hustlr (2 September 2015)

rimtas said:


> What do you mean by that? That reality check should be bullish?  Sorry, I maybe misunderstood you.
> 
> Realistic test also sounds interesting, you can shed some light on that as well.




Rimtas this isn't the first time you have got defensive in this thread. Please don't take these discussions personally.

I'm not suggesting anything about having to be bullish.

When I talk about a 'realistic test' I'm implying that your 'forecasting' is inherently suggesting double digit unemployment, a plethora of companies going broke, months or even years of recession and a complete loss of investor confidence.

In my view XAO sub 2000 is an 'end of the world' scenario and my 'realistic test' to you is - do you really think that is the most likely outcome? 

Perhaps you do, I don't know.


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## Smurf1976 (2 September 2015)

kid hustlr said:


> When I talk about a 'realistic test' I'm implying that your 'forecasting' is inherently suggesting double digit unemployment, a plethora of companies going broke, months or even years of recession and a complete loss of investor confidence.
> 
> In my view XAO sub 2000 is an 'end of the world' scenario




Those things have happened previously so whilst not a good situation, I don't think it fits with an "end of the world" description. We are, after all, living in the aftermath of past such events and overall things haven't been too bad.


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## gartley (2 September 2015)

Anything is possible at any time. I would not discount Rimtas forecast for XAO going all the way back to 2000.

It would not be the first time an index has been in a bear market for years. For example the Nikkei 225 was 40000 in 1990 and then fell to under 10000 twenty years later. Back in 1990 Japan was the envy of the world and everyone was poring money into a "sure thing".

What I don't agree about with Rimtas is that wave 3 is coming now. I think there is too much bearish sentiment around at present for that to happen and the market will either hang around this range or slowly move upward a little further in the next few weeks before the next major leg down takes hold. That is why for me it's just waiting game now. Rimtas was mega bullish with the XAO just as it peaked and got caught out. That's OK as it happens to all of us without exception, but it also stresses the importance of alternate counts when using EW as porper mentioned and not creating bias over one wave count


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## kid hustlr (2 September 2015)

Japan ran to 40k on the back of a tech boom and has not had its population increase in 25 years.

This is my point - Build some context into Elliot Wave theory.


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## gartley (2 September 2015)

kid hustlr said:


> Japan ran to 40k on the back of a tech boom and has not had its population increase in 25 years.
> 
> This is my point - Build some context into Elliot Wave theory.




It doesn't matter the fundamental or economic reasons you think it happened. These lag the market anyway.
The market went into a bear market first. 

My point is "it happened" which means there is no reason it can't happen elsewhere in the globe ( the market losing 75% of it's value that is.)

Elliott Wave Theory like many other forms of analysis can be a useful tool at times and other times not. Personally I think it's best used in combination with other forms of analysis but other like Rimtas think it's the be all and end all of analysis in isolation.

Each to there own


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## rimtas (2 September 2015)

gartley said:


> slowly move upward a little further in the next few weeks before the next major leg down takes hold. .......Rimtas was mega bullish with the XAO just as it peaked and got caught out.





I discussed long term scenario, next few weeks doesn't matter. I even see the opportunity to jump onboard for a short term trade, most likely tomorrow, with a +10% potential if market proves my calculations are correct. Very good waves are on SFY daily, indicating smaller degree wave 2 underway, elioticians can see it, no short term chart this time thus avoiding unnecessary emotions . 

In regards to my mega bullish  comments-yes, at the start of the year I was mega bullish, because I loaded up portfolio with stocks in December, which I started to unload in April, right to the last one in June. 
Please note that in order to make successful  discussion in this forum one must adhere to the rules of herding and post main counts and comments only in favour to the crowd anticipations, write posts about rosy future and only say just a few words about the upcoming crash as a remote alternative adding that it will probably never happen. What is in your head and in your post should be a little separated.

I have my opinion and views on the market, but strategies that involve money making are rarely posted here. I respect you Gartley for your open mind, but I think you like to refer to your previous posts too  much. Well unless it adds you some positive emotions, I don't mind, but this reminds about other market analysts, who also thinks that if some previous analysis was corrct, the rest upcoming will be correct as well. If you noticed, I never or rarely refer  to my previous posts, saying that look-I was right. I don't care really what happened.


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## rimtas (2 September 2015)

kid hustlr said:


> Rimtas this isn't the first time you have got defensive in this thread. Please don't take these discussions personally.
> 
> I'm not suggesting anything about having to be bullish.
> 
> ...





Thanks for the explanation of the "reality check" phrase. Please note that my mother tongue is not English so some phrases I hear first time and I am not sure what they means.  I try to expand a reply to you post, it was interesting. 

So in regards to severe economic conditions that you mentioned-I am not saying any of this would happen. I just saying that Wave c under Wave Principle could bring down XAO to its knees. 
What economic conditions this might bring, I don't know. deeply pessimistic people at or near the bottom will make very different decisions comparing of what they are making now. For example if someone wants to buy a house, extreme optimistic environment is much better to make this decision-people feel certain about the future. Banks give mortgage, seller tons of cash, employer a more motivated employee.  In pessimistic environment those plans are postponed(despite very attractive house prices), everything stalls. Those socionomic decisions later have consequences on the economic numbers, usually years after the bottom. 


If you are interesting what I really think and if this is the most likely outcome-I must say that I don't rule out this possibility. I know that Australians had not had any tough economic conditions, even your parents didn't, and grandparents. This makes them to be unaware what is realy a crisis. And I feel that because of this few generations lasting positive environment, people got very complacent(that's why consumers in Australia have almost the biggest debt in world). I've read here on this forum that 2009 felt already like "end of days", which to me sounds like a joke.

I personaly have dealt with Russian crisis in 1998, 2002 and later were also very tough times in Europe, 2008 collapse brought to my country of origin 20% unemployment figures, busineses collapsed every day all around me. Everything that you referred in your post as "end of days" I went through on my own shoulders, and barely remember now.  
If Australia will have a little bit worse economic conditions than those in 2009 and after, which possible Wave c would bring, I do not see this as "end of the world". It would be normal for me, usual cycle in life, just in different region of the world.  Offcourse for the native Australians this would be a disaster.  A disaster would be also for someone who lives in the million dollar mansion on the beach and will have to downgrade to 5 bed one street from the foreshore. Or for someone driving Maybach which would have to be changed to C class Mercedes. 

In other words-relax. End of the world is not coming.  Use human nature to your own advantage. Pessimistic environment would bring once in a life time opportunities as well, not only double digit unemployment. Wave c ends abruptly and bull market retraces everything back very fast, you will not even notice. 

I usually do not tie economic conditions with my trading strategy. But some decisions in life are influenced by the probabilities which I see on the market, as one thing is certain-market leads, If it crashes, expect consequences. If it rises steeply, expect consequences as well.


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## PennD (2 September 2015)

rimtas said:


> Thanks for the explanation of the "reality check" phrase. Please note that my mother tongue is not English so some phrases I hear first time and I am not sure what they means.  I try to expand a reply to you post, it was interesting.
> 
> So in regards to severe economic conditions that you mentioned-I am not saying any of this would happen. I just saying that Wave c under Wave Principle could bring down XAO to its knees.
> What economic conditions this might bring, I don't know. deeply pessimistic people at or near the bottom will make very different decisions comparing of what they are making now. For example if someone wants to buy a house, extreme optimistic environment is much better to make this decision-people feel certain about the future. Banks give mortgage, seller tons of cash, employer a more motivated employee.  In pessimistic environment those plans are postponed(despite very attractive house prices), everything stalls. Those socionomic decisions later have consequences on the economic numbers, usually years after the bottom.
> ...




Nice post Rimtas. I also have lived through crisis and its true, you forget soon after, and life goes on. But the joy of simple pleasures (a fresh pumpkin) is something money can't buy. I see a sharp correction (crash) as healthy for the long term sanity of society. Re-evaluate, re-structure and carry on. And yes, a once in a life time opportunity. 

I do enjoy the language of Elliot wave and appreciate your grasp of it. Saying that you have made every call from super bullish to supper bearish and throwing in the odd "test of the forum" I have learnt to take each one with a grain of salt for what are you saying really? I have no problem with this, just take each post on its merits.
Cheers Penn


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## rimtas (2 September 2015)

This is a quote from todays article
http://www.asx.com.au/prices/market-news-detailHome.htm?an=DJDN000020150902eb920001t

_Australia has ridden one of the longest economic expansions in modern history—a run of 96 quarters without a recession_

My thoughts reading history like this-two things come to mind straight away-"Lucky Country" and biggest consumer debt in the world. The optimism levels that were build up during such long term uptrend can't even be measured in normal scale, it needs some extension to the Moon's orbit I think. Long term positive sentiment in Australia is so bullish, that US historic extremes looks tiny.

Debt levels are good sentiment indicator, because no one forces people to load on debt. It is a consequence of positive sentiment about the future. Paying 1mil bucks for Sydney average apartment with thought that one can repay this debt in 30 years or one day break even on investment property-state of mind must be in a dream phase, to say at least.


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## gartley (3 September 2015)

Rimtas.

Any reference to earlier posts/views are used as points of reference to facilitate analysis of current views/analysis.
Sometimes it's 5-6 months since that earlier post and it's taken all that time for the market move to play out. Readers will not remember a post from 6 months earlier.

The last analysis was that the XAO had a high probability of finding a low on this leg down in the 4800-5000 zone based on statistical cyclic analysis of price reaching extreme levels relative to excursions away from a nominal trend level.  Taking those charts at face value one would expect a rally would carry into September and back up to 5300 and may extend to 5400-5500 based on that cycles work. It may work out or it maybe a dud, but my plan of attack is based around that analysis.

Unlike you we are not chopping and changing wave counts  gyrating from bull to bear  in this volatility.


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## rimtas (3 September 2015)

I have nothing more to add. Except that Gartley patterns are like derivatives of the Wave Principle. People like you do not fully understand the main method, so they turn to side methods, like gartley, head and shoulders, penants, triangles etc. Stand alone EW is best when used alone, with no additional technical noise, which is only distracting from determining path upon which market is operating. The only addition to EW is socionomic thinking, which helps in understanding what wave is in progress, but it is still not the holy grail. 
 To trade successfully , one must trust waves of social mood and acknowledge that it is the way upon market operates. This doesn't mean that one will always know what wave is in progress, but sometimes market delivers probabilities close to 100%. Never lost money with that. Just know when it is time and when not and money comes along.  


After more than one year in this forum, I see that there is little interest in keeping this thread going-there are no elioticians that fully understand and appreciate the method.  Not to speak about those who actually trade it, and trade successfully. It is nice sometimes for me to post ideas, but I am loosing interest too. 
Cheers


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## Porper (3 September 2015)

rimtas said:


> People like you do not fully understand the main method




That's a bit unfair Rimtas as there are a few on here that understand it very well.


rimtas said:


> Stand alone EW is best when used alone




I have tried using Elliott Wave as a standalone method with mixed results. In choppy markets like this I don't think the theory works well at all...and I have spent years learning and trying to master it. 




rimtas said:


> After more than one year in this forum, I see that there is little interest in keeping this thread going-there are no elioticians that fully understand and appreciate the method.




Again, there a several on here that have a very in-depth understanding of Elliott Wave. It isn't the be all and end all Rimtas.


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## rimtas (3 September 2015)

Porper said:


> I have tried using Elliott Wave as a standalone method with mixed results. *In choppy markets like this I don't think the theory works well at all*...and I have spent years learning and trying to master it.





You must be joking gartley. 
You are in the most fastest, most steepest  Primary degree decline in the entire history of the market, that produces the clearest Ew structures _ever_, and you call it choppy market? Maybe that's why you had mixed results and spent years mastering it, without success.  Wrong approach was used, you wasted your time. You should have better used this time to study third waves-that's were the full focus of eliotician should be. They all spend too much time trying to understand corrections, and when third comes, they refuse to recognize it, until it is over. 
Now wacth and wonder, this one will be a big surprise.


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## CanOz (3 September 2015)

rimtas said:


> You must be joking gartley.
> You are in the most fastest, most steepest  Primary degree decline in the entire history of the market, that produces the clearest Ew structures _ever_, and you call it choppy market? Maybe that's why you had mixed results and spent years mastering it, without success.  Wrong approach was used, you wasted your time. You should have better used this time to study third waves-that's were the full focus of eliotician should be. They all spend too much time trying to understand corrections, and when third comes, they refuse to recognize it, until it is over.
> Now wacth and wonder, this one will be a big surprise.




You should be more humble and master the language first mate, otherwise lets see you post trades....real trades....

Don't be so ill critical to well respected long serving members. Makes you look like an idiot.

CanOz


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## gartley (3 September 2015)

rimtas said:


> I have nothing more to add. Except that Gartley patterns are like derivatives of the Wave Principle. People like you do not fully understand the main method, so they turn to side methods, like gartley
> Cheers




Rimtas, I think you a losing it......

Where in my last post on this thread did I make reference to Gartley patterns? I only mentioned Cyclic Analysis...
I have only mentioned Gartley setups 3-4 times on this forum. They were all trades I took and thankfully they all turned out well. They don't always. The first one was in April and it marked the top of the market at 6000 in conjunction with fibonacci time analysis. It was my first post on this website. As for Gartley Patterns being derivatives well I am not sure and I don't really care. Gartley patterns and variations thereoff are marked by fibonacci ratios at specific points that differentiate them. RN Elliott didn't even use Fibonacci ratios back in the 30's, It was Prechter that started using them in the late 1970's after earlier work by Robert Rhea and it was Bryce Gilmore and Larry Pesavento who first started applying them to specific patterns and Prechter copied them.

Anyway who cares. What concerns me is how I can use these harmonic patterns to give me an edge in the market. That's the bottom line.

Unless you are consistently profitable trading EW then you have not mastered it. Personally when I have applied EW in isolation I have achieved best results anticipating  completions of 5 wave structures and 3 wave corrections especially contracting triangles.  (That's how Prechter did best in it too) I have had less success with finding the early stages of a third wave. 

For me the key is identifying the patterns first and then appending wave counts about those patterns. Although the best elliotticians swear by the count first. The trouble with the count is: how do you know you have the correct wavecount? They key is the pattern.


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## Triathlete (4 September 2015)

gartley said:


> Anyway who cares. *What concerns me is how I can use these harmonic patterns to give me an edge in the market*. That's the bottom line.
> 
> Unless you are consistently profitable trading EW then you have not mastered it.
> 
> ...




I agree Gartley, once you have an edge just use it to the best of your advantage.

I also do not use EW in isolation as it is a subjective tool to use.

What I have found best for me is doing some *price analysis first *and finding out the strongest price levels of the stock and* then applying EW and time analysis *

This seems to give me the best results as it helps me zero in on the best and highly likely profitable trades in my medium to longer term trading and by using all three types of analysis also has kept me out of many false moves.


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## qldfrog (4 September 2015)

Rimtas,
please do not be so emotive/engaged:I for one follow your various inputs in these forums and I appreciate them, if only to have another point of view.
I doubt anyone is "attacking" you or your views in a personnal way.
Few people here mention extreme reversal figures, you do;
and with BHP at $22 or WOW where it is now, it is a welcome sanity check  in term of risk management;
I do not know enough about Elliot waves to be constructive in this debate.
Gartley has a moderate cool headed approach probably based on experience, but we also need the enthousiam you bring
i could only suggest that  you may want to get back to some of your older posts, say 6 months ago and have a quick check to see how you fare the + the -, and share your reflections;
That is a way to improve your edge and refine your methodology.I found that "step back" quite useful myself.
Thank you, and the other key members here for the thread.


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## PennD (4 September 2015)

rimtas said:


> You must be joking gartley.





I sometimes mix up Gartly and Porper  by a quick glance at there avatar. I think that has happened here also. 

Well said qldfrog


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## Porper (4 September 2015)

rimtas said:


> You are in the most fastest, most steepest  Primary degree decline in the entire history of the market, that produces the clearest Ew structures _ever_, and you call it choppy market? Maybe that's why you had mixed results and spent years mastering it, without success.




Well if the ASX hasn't been choppy over the past few years I don't know what your definition of "choppy" is. Take out the banks and TLS etc. and our market has done nothing.

I don't want to go into detail Rimtas as it's irrelevant to me but not so long ago you were calling for the biggest rally in history, especially in the banks. You were almost euphoric. You were totally wrong. You chop and change your counts almost daily which isn't conducive to being profitable at all. Last comment by me, you are back on ignore.


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## Logique (4 September 2015)

qldfrog said:


> Rimtas...I doubt anyone is "attacking" you or your views in a personal way...
> ...Gartley has a moderate cool headed approach probably based on experience, but we also need the enthusiasm you bring...



Well said. I freely admit that EW is beyond my ken, so I really appreciate the exchange of ideas between Rimtas and Gartley, which seems for the most part civilly conducted.  It helps me to understand the market action.


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## Craton (4 September 2015)

rimtas et al

Allow me a post on a subject I never knew existed until I joined ASF. Further allow me to thank you for the EW and XAO discussion.

Like so many things human, there will always be opposing views which when conducted in a civil and level headed manner, leads to a fuller, deeper understanding of the subject matter.

Rimtas posts what is seen in the EW chart/s from rimtas's point of view/understanding. Nothing wrong with that. Of course rimtas's point of view isn't the be all and end all and we all should be mindful of that. 

Now, I'm saddened that the commentary here was devolving into a personal affront but heartened to read that like myself, fellow members find this thread on EW is of some worth.

To the main contributors, please do not stop this discussion because of personal bias. It's good to have opposing views as stated above because I'm sure that when your views are in sync we'll all sit up and take notice.

Rimtas, you are very brave for stating what you see, don't stop because I for one, look forward to not only your view, but the view of all the contributors to this thread. Please continue.

One more thing. Early in the year the markets were looking bullish and no doubt charts were reflecting this. Oh how things have changed!


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## rimtas (4 September 2015)

PennD said:


> I sometimes mix up Gartly and Porper  by a quick glance at there avatar. I think that has happened here also.
> 
> Well said qldfrog




Yea, sorry Gartley, I didn't even realized porper stucked his head here so at quick look I somehow assumed that discussion was still  between gartley and me.  Porper sounds like an idiot to me, so he is on ignore list. He is one of those who bites one count (usually bullish forever) and never let it go. I was laughing when he posted that CBA will take the shape of triangle and small caps will take off. TLS was also funny. He must have known that small caps are leading the market, and the fact that they are near 2009 lows says everything. 

By the way, I noticed that people don't like when the count changes. But it is essential, because there is no sure way of knowing what wave operates untill it reaches the "point of no return". Changing counts significantly adds to profitability. I am not Porper, I am not bullish forever, trying to fit every structure into bull market. I was bullish, but changed my point of view in the middle of wave (1), despite it was a bunch of 3's and looked like correction. Also, in every post where I was bullish, I added one sentence-there is an alternate count. At the time I could not be bearish, because consensus in this forum usually throw me "check the reality , mate" phrase.  

Going with the crowd in discussions is essential to keep discussion alive.  I remember when I posted bullish forecasts I received many responses with support and people were saying that they like them, that this is a good work.  When I turned bearish, I understood that the messenger of bad news deserved to die and with time conversations were only by myself alone . 

In order to keep this discussion alive, I think one must be bullish and reflect the situation that is now alive and well-everyone here is super bullish, fed by bullish media, bullish newsletters, bullish examples(like buffet and so on) and bullish counts from so called elioticians like Porper. 

So I am thinking now, what should I do-go with the crowd and post what it likes, or go with the trend and post what I see. The first would keep discussion active, alive and well, the second would make money only for me but there would be no benefit from social interaction which is the main purpose of being in the forum in the first place.   In the past year I jumper form the first to second too frequently, so crowd decided that I was changing counts too frequently, while in reality I was switching between interaction modes. 

I doubt that people here are trading like they declare, money making is a little bit more complex than that, unless you have 10K account and you are OK with blowing it to dust on the first gartely pattern or RBA announcement or earnings results. During the years of trading using Wave Principle I accumulated not only a good wealth, but good knowledge as well.  You saw the charts and counts in this forum from me, but only one from a hundred was really tradable. I noticed this at the beginning since I joined this forum , but instantly got smashed by the so called "daytraders" who laughed from my 2-3 yearly trades, which were and still are 100% profitable. When I enter the trade, I know that I will make money, just do not know how much. 

  The rest is just social interaction and fun-all those charts, intraday moves and swings in emotions and views. They do not have influence of how I trade, because this is automated by specific patterns which I know what outcome they will bring. Someone suggested here that I show my trades and accounts, so maybe I must bring my key from the house and say where my wife is as well. Know the limits. I do not show you anything, and I have no any responsibility to show.


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## Smurf1976 (4 September 2015)

Craton said:


> rimtas et al
> 
> Allow me a post on a subject I never knew existed until I joined ASF. Further allow me to thank you for the EW and XAO discussion.
> 
> ...




+1

I don't know enough about this form of analysis to make a useful contribution to this thread but it is certainly interesting and worthwhile. I hope those who do know about it continue to post.


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## Bill M (4 September 2015)

Smurf1976 said:


> +1
> 
> I don't know enough about this form of analysis to make a useful contribution to this thread but it is certainly interesting and worthwhile. I hope those who do know about it continue to post.




+2

This is a very interesting thread, it is one of the first I read. Sorry I can not contribute anything of substance but please keep up the good work to all of you.


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## rimtas (5 September 2015)

Who follows Motley Fool-they just launched a million Dollar Portfolio project. The timing is just perfect(shows how extreme bullishness is here, despite a 20% plunge in prices). I read them with interest, I found their newsletters quite a good sentiment indicator for both short term and medium term timeframes. The message in most recent newsletters(last week) summarized sounds like this: "Do not sell anything".
 I am not jumping to conclusions publicly, just pointing a finger to one more socionomic indicator. I think I will name it a Foolish indicator, for future references.


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## shouldaindex (5 September 2015)

Hi Rimtas, 

MotleyFool are never bearish.  It's their job to get as many people into trading shares and reading their advice, and the worst way to do that is to tell them they should stay away by lessening their investments.  I agree it's a good contrary indicator, I read HotCopper sometimes just to see what other humans are up to.


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## rimtas (5 September 2015)

Yes, it is true that they are never bearish. But sometimes they are scared. When the wave (1) was approaching it's bottom, they wrote quite a few newsletters about the "upcoming crash". Back then they were exploring options of what situation will became if the crash would lie ahead. It was really bearish newsletter.  Of course, they said that it would be even more better as yields would go up. 
 But the bottom line is that If you read them and try to grasp how the author _feels_ at the moment, you can put this in perspective with market movement. Knowing that market makes people to react and feel one way or another, you can add this sentiment to your basket of other market observations and have a clearer picture. 

Experienced traders/investors know that when situation becomes too crowded, market tends to turn. They are partially correct, that's why contrarian point of view works. But only if you put it alongside the Wave principle. Only knowledge about how people behave in one wave or another can give you an edge. Too bearish doesn't always points to the turning point, sometimes it is a kick-off of the larger degree wave down, or the state of Point of Recognition.  So context of sentiment is the key. 

Previously I deleted all Foolish newsletters after reading them, but know as I spoted some value, I started to archive them. All in all, they are too popular and this influences authors decisions how to write, how to stay with the crowd, how to be the part of it (unconsciously).  Because other way no one will buy their services.


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## rimtas (8 September 2015)

I mentioned  that I do not post short term forecasts anymore, thus weekly and Daily time frames should be enough. There are enough elioticians out here, let them do the hard intraday work. 

I can't let go BHP scenario which even at weekly now looks like complete-last five waves of wave C ended at $22,40.So now I am looking at Wave (D) multimonth advance, unless the bottom of 19.98 falls out, which would be very bearish long term.


Also I am changing strategy of posting, from now I will do like most peple here does-remind about previous posts.
So the bottom line is that one year ago I made a call for wave C, which should be a five wave affair and drop Impulsively from $40 to $25. Original forecast can be found here:
https://www.aussiestockforums.com/forums/showthread.php?t=1335&p=840445&viewfull=1#post840445
 And that is what exactly has happened. There were attempts to find a bottom of wave C along the way, but now subdivisions looks best so it is time to put real money on this count. 
So basically it is a Call. 
Entry point is at $24.09. Exit will be determined from future price action, depends what it brings on the table.


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## rimtas (8 September 2015)

Foolish indicator today turned bearish on banks, probably confirming that smaller degree wave C up is underway. They said: 

_"But times have changed. Companies like Commonwealth Bank of Australia (ASX: CBA) and Westpac Banking Corp (ASX: WBC) have been crunched over the last six months and, in my opinion, remain overpriced.

 Making matters worse, some analysts have questioned the banks' ability to maintain their dividends should times get tougher. At their current prices, that's not a risk I'm willing to take"_


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## SuperGlue (8 September 2015)

rimtas said:


> So basically it is a Call.
> Entry point is at $24.09. Exit will be determined from future price action, depends what it brings on the table.




Please note:

Ex dividend day tomorrow - Dividend $0.8571 -100% franked.


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## rimtas (9 September 2015)

SuperGlue said:


> Please note:
> 
> Ex dividend day tomorrow - Dividend $0.8571 -100% franked.




Upss... Before entry I haven't checked dividend dates...Thanks. 
This probably means that I will have an opportunity to add more. But short term structure indicates that correction below $24 is likely, so this will not be something that I haven't expected. 
 But at the end this doesn't matter, because this position has a time horizon of about 2 years or whatever it takes for Intermediate wave (D) to reach it's top. It is probably my first position which is orientated on the wave of such big degree. 


I just noticed that BHP has highly reacted to the OIL price movement, and OIL just entered in the biggest correction UP  since 2013, which should last many months and the most recent bottom should be rock solid. 
Iron ore is clearly in wave (4) sideways correction (I covered this in previous posts about BHP), so the conditions for a BHP rise are positive if looking at the energy side.


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## rimtas (11 September 2015)

Just pointing out that market has been in the same mood just a few years ago, as those two fractals suggest. This doesn't mean that the outcome will be the same, as market dropped from one degree higher now, but if market starts to drift sideways in the moths to come(usually it is  positive season till new year), consider correction, or it's first stage, is over. 
All in all, there are only three waves from April top, but definitely not 1-2-3, most likely it is 1-2,1-2(still unfolding), or ABC.
Basically a lottery.


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## gartley (12 September 2015)

rimtas said:


> All in all, there are only three waves from April top, but definitely not 1-2-3, most likely it is 1-2,1-2(still unfolding), or ABC.







rimtas said:


> *Basically a lottery*.




*This is the problem and my point exactly*. You have gone from Bullish in April,  to ultra bearishness as of last week pushing a continuation of a 3rd wave down. Now it's "a lottery"

At least we have 3 possible wave counts in question that you mention:

1: 1,2,3 done and 4 developing  and 5 to come

2: 1-2, 1-2 and the point of recognition to come

3: ABC

Earlier when the last major low was posted  cycles suggested that we get a rally into September. Nothing has changed yet and these cycles suggest another push to new recovery highs in the next 9-12 sessions approx..

So that most probably eliminates the 1,2,3,4,5 wavecount option and we should be focusing on the 1-2, 1-2 or ABC. ( assuming ofcourse we are in a bear market)

Now at this point in time doesn't really matter which one as our primary objective is to be positioned for the next leg down as the finish of this rally.

Interestingly I am forever receiving emails from EWI about total financial collapse etc.... Maybe later they will be correct but for the next few weeks if you are swing trader like me it's not the case.


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## PennD (12 September 2015)

gartley said:


> *Interestingly I am forever receiving emails from EWI about total financial collapse etc.... Maybe later they will be correct but for the next few weeks if you are swing trader like me it's not the case.*



*

Fear sells... they need to make there money someway... if they traded their  "wave counts" they would have blown their accounts up years ago*


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## gartley (12 September 2015)

PennD said:


> Fear sells... they need to make there money someway... if they traded their  "wave counts" they would have blown their accounts up years ago




There's are reason why the likes of Prechter and other's write newsletters for a living........


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## shouldaindex (12 September 2015)

I always had this thought about trading.

If you are right even 6 / 10.   That means the 4 right and 4 wrong cancel each other out assuming similar sized wins / losses.  Let's say the average size of each gain / loss per trade is 5%.  So the 2 that win are your returns.  

If you make 10 trades per month, you make 10% (2 x 5%).  Times that by 12 months...

But it never happens like that, if traders were right 60% of the time and made 2 trades per week, that's 120% a year (uncompounded).  

So something in that formula is missing in reality.


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## gartley (13 September 2015)

shouldaindex said:


> I always had this thought about trading.
> 
> If you are right even 6 / 10.   That means the 4 right and 4 wrong cancel each other out assuming similar sized wins / losses.  Let's say the average size of each gain / loss per trade is 5%.  So the 2 that win are your returns.
> 
> ...




For me it's almost like this except losses are stopped as early as possible  not at an arbitrary level like 5%. Losses are determined more by pattern of trend and a decision made very quickly .   For about 10 trades a week taken on average  4 are small losses, another 4 a week are small gains exiting because either "   shaken out" or not happy with the developing pattern of trend. The remaining 1 or 2 are the ones that come through.


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## skyQuake (13 September 2015)

shouldaindex said:


> I always had this thought about trading.
> 
> If you are right even 6 / 10.   That means the 4 right and 4 wrong cancel each other out assuming similar sized wins / losses.  Let's say the average size of each gain / loss per trade is 5%.  So the 2 that win are your returns.
> 
> ...




Say you have $1mil, you're not punting with the entire lot per trade. 
To make things simple for the sake of argument you'd take $200k per trade. (1% risk to total account equity per trade)
200k @ 120% = 240k = 24% return


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## rimtas (13 September 2015)

gartley said:


> There's are reason why the likes of Prechter and other's write newsletters for a living........




Did you know that the richest people who approach a market is not the ones who trading it, but who are analysing it and give other services related to market trading? Be it brokers, market advisors, forecasting firms like EWI, banking services etc. 
I am not talking about those people who buy entire businesses, so please do not mention Buffet and the like, who made they fortunes in a great bull market, that is stalled rigt now..
This is about traders, those who want to be rich quick. Almost everyone here is a trader, making money to their brokers, banks, newsleter writers, forecasting firms.
I understood this long time ago and trying to reduce my trading frequency as much as possible and trade waves that could be as long as possible.


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## gartley (13 September 2015)

rimtas said:


> Did you know that the richest people who approach a market is not the ones who trading it, but who are analysing it and give other services related to market trading? Be it brokers, market advisors, forecasting firms like EWI, banking services etc.
> I am not talking about those people who buy entire businesses, so please do not mention Buffet and the like, who made they fortunes in a great bull market, that is stalled rigt now..
> This is about traders, those who want to be rich quick. Almost everyone here is a trader, making money to their brokers, banks, newsleter writers, forecasting firms.
> I understood this long time ago and trying to reduce my trading frequency as much as possible and trade waves that could be as long as possible.




I won't argue with you there Rimtas. I agree , for newsletter writers, it can be easier to make a coin selling services than actually trading. And over trading is not a good thing, but holding onto longer term positions in a  wildly volatile market can equally be as nerve wracking.


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## rimtas (13 September 2015)

gartley said:


> There's are reason why the likes of Prechter and other's write newsletters for a living........





I quote once again, because it seems that you didn't understand  my reply to your remark.
The only reason Precher and the others writtes newsletters is money. It's their job, and they are damn good at it, making millions of bucks-ordinary trader here can only dream about this outcome. Don't be jealous. If everyone can be as good as Precher in their fields, we all would be rich. 

Also, those newsletters provide quite a good bunch of data, that otherwise is too expensive to buy separately. For 30-50 buck a months you get a lot of value for your decision making. Leave their opinions aside, focus on the data, do your own research, ultimately money is yours and you are responsible for this.


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## gartley (13 September 2015)

rimtas said:


> Don't be jealous. If everyone can be as good as Precher in their fields, we all would be rich.




I understood you the first time........

I was subscribed to EWI for 7 years even did a 5 day training course with them. Back then there where different analysts working with them. Thereafter I found the advantages but also the many weaknesses of EW. I took the blinkers from my eyes and found a whole new world of T/A out there a lot of it by trial error and a lot from real successfull traders, ones that don't need to write newsletters to earn a living.

Prechter got lucky and for a short while and made a few good calls in the 80's Since then his calls and forecasts have been 50/50 as I follow ratings for investment advisory. To his credit he called the crash of 87 and after that his calls for a bear market has been rubbish. The market has run up 12 fold since then. He maintained his bearish stance all the way to the 2000 top. He did the same during the bull market for gold from 2000 to 2010. *That drummer has cost people so much money over the years it's not funny.*

Stop misleading people rimtas, are you an agent for EWI or something???? Either that or your totally brainwashed


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## Porper (13 September 2015)

gartley said:


> Stop misleading people rimtas, are you an agent for EWI or something???? Either that or your totally brainwashed




I think the latter gartley but the way he jumps to defend Prechter all the time maybe he has something to do with them. They have been advertising a lot recently; last week I got emails from them almost everyday. Same techniques used...fear...to sell newsletters. it works unfortunately.

I also did Prechters course a few years ago as well. Enjoyed it but soon realised that Elliott Wave didn't make you the money, at least not as a standalone method.


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## rimtas (13 September 2015)

gartley said:


> *That drummer has cost people so much money over the years it's not funny.*




I am not defending him. I just pointed out that he is very good , basically the best in his field. I am not referring to his calls, EW or socionomics. I am referring to his business. Can you point me out how many such successful businesses (related to market forecasting/newsletters) you've seen that managed to stay in the market for decades, and grow substantially, today employing over hundred of people? 
If EWI was listed on the exchange, their stock would be good as hell. Prechter alone earns 0,5 mil every month  just sitting in his chair and writing his Theorist, and  at the same time I am sure he enjoys his job a lot. Do you enjoy your job, and get 0,5mil bucks for it every month? 

And yes, I am related to EWI. The one who is brainwashed is Porper. He is EW zombie, who thinks that CBA will buck the trend, when All Ords crash to new lows.


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## gartley (13 September 2015)

Porper. I enjoyed it as well, even the time thereafter I enjoyed in it's application. However in this learning process I only found 2 or 3 EW patterns that could be used consistently. The hardest to find was the 3rd wave, because just as you thought a 3rd wave was about to start or even continue in the direction of the trend by counting something else would happen. Only on rare occasions I was able to find the 3rd wave early.
Once you realize it's a 3rd wave nearly every other trader does too or at least that it's a descent move and then everybody jumps in.

I didn't start hitting my stride until I left EWI because I started trading "what I saw" instead of following the advice of Prechter and others there. The reason for this because I started looking at the market with an open mind and did not think in terms of the EWP only. I developed my own cycles approach and I find trades every single day off 1 hr, 4hr and 8Hr charts. 
With EW need to wait until specific counts or patterns set up and some times these can be few and far between, but ofcourse I still lookout for them. 
To be honest I find more trades using harmonic patterns like Gartleys etc than EW patterns. I try and keep it simple with these harmonic patterns, firstly they must be symmetrical and as close as textbook as possible. I don't like them skewed, I keep away from those. I know a lot of other traders that trade anything closely resembling these harmonic patterns but they are only correct 20-30% of the time wheareas filtering and only talking the best looking setups will give on much better strike rate.


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## gartley (13 September 2015)

By the way here is a critique by this chap of some of EWI's calls post the 2009 low.  Interesting thoughts in his "intelectual Hubris" in the last paragraph))))))

http://www.thebullbear.com/profiles/blogs/the-ewi-argument-a-critical-1


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## rimtas (13 September 2015)

gartley said:


> By the way here is a critique by this chap of some of EWI's calls post the 2009 low.  Interesting thoughts in his "intelectual Hubris" in the last paragraph))))))
> 
> http://www.thebullbear.com/profiles/blogs/the-ewi-argument-a-critical-1




at the end I found this one more related to reality-in order to look clean, you must throw shi.t on others(just like gartley does):

_"Need some help staying on the right side of the markets?  Join the BullBear Trading room at TheBullBear.com."_

says everything, one more newslewtter selling crab like all others.


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## Porper (14 September 2015)

gartley said:


> By the way here is a critique by this chap of some of EWI's calls post the 2009 low.  Interesting thoughts in his "intelectual Hubris" in the last paragraph))))))
> 
> http://www.thebullbear.com/profiles/blogs/the-ewi-argument-a-critical-1




gartley,I have seen a similar critique but can't quite remember where now. I was actually a member in 2009 I think it was when Prechter was firm in suggesting subscribers going "200% short". That was enough for me and I stopped reading after that. It was blatantly obvious their wave count was incorrect. Thing is they can't ever admit they are wrong so change the wave count to suit. A shame as I had a lot of respect for Prechter bringing E.W back to life.

I especially find this part very telling from:  http://www.thebullbear.com/profiles/blogs/the-ewi-argument-a-critical-1

"CONCLUSIONS

Here I will try to examine just a few of the problems of trading methodology which have contributed to the disastrous performance of EWI during the period under review.

 TRADING DISCIPLINE AND STOP LOSSES:  EWI appears to exercise an astounding lack of trading discipline.  At no point does EWI instruct its followers on stops, stop levels or alternate scenarios which would call its bearish assumptions into question.  This defies the most basic, elementary, generally accepted rules of trading and risk management.  EWI assumes that it will eventually be correct due to an infallible "analysis" and that all will eventually be made right and whole when "The Big One" hits the markets.  This is quite simply the mentality of the amateur speculator."

Spot on i.m.o.


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## rimtas (14 September 2015)

Porper said:


> At no point does EWI instruct its followers on stops, stop levels or alternate scenarios which would call its bearish assumptions into question.
> Spot on i.m.o.




This is rubbish. All calls were covered with stops, alternate scenarios explained. Just one example:






 I just wonder how this article got in the web and the author didn't get a lawsuit. Probably he will get soon one from EWI for misleading information and slander. I don't know how far EWI can go, but they definately have more recources than that bulbear.com and if they wanted probably that guy can be crushed. 

I do not say anything about "wrong" calls from  Prechter, but appears that this article was based only on the fact that no stops were used, to be rough, which is not true. Every call was tracked and Precheter recommended what to do next through Interim report issues. Ussualy he recommended to cover shorts with a few percent loss.

All Prechter calls from 2009-2015 combined, if executed to his plan would have ended with 210 SPX points loss.  And also time frame for study was chosen carefully-author of bullbear.com avoided 2007-09 on purpose, as during that time all Prechter calls gained subscribers +900 points.  So I would say it was one sided kick to EWI gates providing his own misleading interpretation of Prechter calls in order to gain more subscribers to his own service.


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## rimtas (14 September 2015)

Just to break this nonsense about Precter and how Porper or Gartley are better, nicer, taller and smarter, I am moving on to another topic.


After almost a year of never ending recomendation to buy BHP, Folish indicator just turned bearish on the entire mining sector. They say in today's newsletter , quote:

_"real gamble", 

"The reality is that mining is a highly risky and capital intensive business. As such, it’s usually only shareholders’ wealth that gets mined!"

"The same can be said of playing the pokies"._


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## Joe Blow (14 September 2015)

Gents, I must insist that the personal attacks and insults in this thread end now. This thread has been very informative and educational up until this point. It is a shame that it has come to this.

Now, if we could please get back to the topic at hand: Elliott Wave and the XAO.

Thank you all for your co-operation.


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## Porper (15 September 2015)

Textbooks will tell us that a triangle will normally break in the direction of the prior trend. All things being equal this is usually the case. But, we have to take other patterns into consideration...plus a lot of consolidation patterns over the past 2 months have proven to be reversal setups.

Massive volume occurred on the 25th of August low as price rejected from a zone of support. Notice the following retest was accompanied by declining volume...lack of sellers. I have also put some time projections on this chart suggesting an interim low is in. A bounce up towards 5450 - 5570 should follow. Of course the Fed this week could change the short term picture. News events shouldn't change the long term patterns though.


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## rimtas (15 September 2015)

Porper said:


> Textbooks will tell us that a triangle .




You are delusional if you see a Triangle here. You are just like Prechter-he bited the bearish bullet and never let go, and you are biting the bullish bullet. Not much difference between you too, lol. As far as I can see by reading EWP you understood just one sentence from it -"Trend is always up". Good luck with that. Prechter ended up shorting the advance, you do the same in decline-trying to pinpoint a bottom. 
Those elliotwave pupils just can't take the market per se, always see something which is non existent.

And by the way, you just changed your count. You laughed at me when I did this months ago, but inevitably market forces you to do the same. Just you are too late, so much of a practical EW application...


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## rimtas (15 September 2015)

Joe Blow said:


> This thread has been very informative and educational up until this point.




It is been very informative and educational not up until this point, but until the point when Porper started to sneak his head up there and spread a disease, having nothing to say by himself.


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## cynic (15 September 2015)

I've been enjoying the varied perspectives on this style of analysis greatly, and whilst my darker side has been indulged by some of the other things that have been happening, I'd hate to see anyone needlessly and recklessly jeopardizing the possibility of their continued participation, particularly when such passion and enthusiasm exists.


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## rimtas (15 September 2015)

Well, as Porper covered a long side, I will cover short. To fill the gaps, so to say. When he say something about short, I will contrary him with longs.


This is the only instrument that one should hold(and accumulate) _long_ right now. Who likes more adrenalin there is another similar under symbol BBOZ. 
 Foolish indicator just launched "A Million dollar portfolio", so this extreme bullishness indicates that Primary Degree Point of Recognition lies directly within the months ahead. Soon we all witness moves that will make a history. Be short, and be safe. The "dividend investing" dream is coming to an end. 

Disclaimer: Only experienced speculators should take short positions of any kind. If you are not experienced enough, cash is the king. Stay away from stocks, realestate and bonds. If you don't have what to sell, sell your mama's necklace.


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## rimtas (16 September 2015)

with BHP everything is quite simple-it just follows oil.


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## rimtas (16 September 2015)

Same story with NY  and London listed BHP.
London's has clear five from the bottom.
NY has a bearish fractal, which I think will fail. Failed bearish fractals are extremely bullish. All it needs is the rise of 0,5% to confirm.


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## Porper (17 September 2015)

Porper said:


> Textbooks will tell us that a triangle will normally break in the direction of the prior trend. All things being equal this is usually the case. But, we have to take other patterns into consideration...plus a lot of consolidation patterns over the past 2 months have proven to be reversal setups.
> 
> Massive volume occurred on the 25th of August low as price rejected from a zone of support. Notice the following retest was accompanied by declining volume...lack of sellers. I have also put some time projections on this chart suggesting an interim low is in. A bounce up towards 5450 - 5570 should follow. Of course the Fed this week could change the short term picture. News events shouldn't change the long term patterns though.




Getting towards crunch time now. Not only in regard to the Fed's decision tomorrow but also the patterns...which are more important. If the triangle triggers a leg higher the target has a good chance of being achieved as a minimum. That's the good news.

The bearish trigger is the 25th of August low. Close beneath that level (4936) and a substantial sell off is increasingly likely. 4600 area from an Elliott perspective probable which sits just above the 50/61.8% retracement zone at 4524-4186. Exciting few days ahead. Great for the day traders.


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## gartley (17 September 2015)

Porper said:


> Getting towards crunch time now.




Hello Porper.

Yes finally it looks like major world indices will finally break out one way or the other. Interestingly about triangles. As you mentioned generally the breakout is in the direction of the one larger trend. Such as ofcourse a wave 5 thrust from a wave 4 triangle or a wave  c thrust from a b wave triangle.

In some cases it doesn't always work that way. For instance looking at the pattern of trend the last few weeks most Ellioticians would assume we are in a wave 4 triangle now. But there is also an alternate, and that is that we had a wave a of 4 up a triangle b and now a thrust up to c.  This is what needs to be clarified and unfortunately EW alone can't do until after it's already happened.
That's why we need to look to other means to give us clues.

Personally I think the break will be to the upside (and current pattern of trend suggests this as it's already happening) and in the XAO banter thread I have posted some cycles charts the support this stance.

Having said that because we have a triangle in play the move will be a "thrust" can happen quite quickly.  After the move is finsihed will be more interesting IMO


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## Porper (17 September 2015)

gartley said:


> For instance looking at the pattern of trend the last few weeks most Ellioticians would assume we are in a wave 4 triangle now. But there is also an alternate, and that is that we had a wave a of 4 up a triangle b and now a thrust up to c.  This is what needs to be clarified and unfortunately EW alone can't do until after it's already happened.




Yes, from an Elliott stance we should be in a wave-4 triangle with a big leg down to come...perhaps this will be the way forward. However we can't ignore the strong demand that transpired in late August. Plus the fact that conventional triangles can be reversal patterns although most believe this to be an untruth.

We use different time cycle analysis gartley but interesting that both techniques have been pointing to an upward move. I have better time cycles on the banks, but if they rally so will the XAO.


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## gartley (17 September 2015)

Porper said:


> Yes, from an Elliott stance we should be in a wave-4 triangle with a big leg down to come...perhaps this will be the way forward. However we can't ignore the strong demand that transpired in late August. Plus the fact that conventional triangles can be reversal patterns although most believe this to be an untruth.
> 
> We use different time cycle analysis gartley but interesting that both techniques have been pointing to an upward move. I have better time cycles on the banks, but if they rally so will the XAO.





I am glad I moved into the banks last week


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## notting (17 September 2015)

gartley said:


> I am glad I moved into the banks last week




Well, as long as it wasn't out of resources.


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## rimtas (17 September 2015)

gartley said:


> I am glad I moved into the banks last week




Wait 1 more day, and then say are you glad or not.  W4 triangle that you and porper sees is non existent-many other stocks, real estate, us indices finished another second wave and the crash is underway. XAO futures pinpoints nicely the short term 1-2,1-2 subdivisions, hiding a triangle as a cover for those who will be waiting a rebound later when 4700, 4600 or whatever levels are reached. Remainds me about Prechter just in reverse now...you are so bullish, that you can't accept the idea that a normal wave structures that fits in standard deviation scale are just gone. 
In a crash like this market will be in an oversold position until the bottom somewhere below 3000 is reached, most likely next year. There will be no any relief rallies biger than those  you already saw that will make market overbought even short term.


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## rimtas (17 September 2015)

Let's laugh like real mates


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## Porper (17 September 2015)

rimtas said:


> Let's laugh like real mates
> 
> View attachment 64344




Can anybody spot the big mistake with this chart? Clue...a series of first and second waves...to where?


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## gartley (17 September 2015)

rimtas said:


> Wait 1 more day, and then say are you glad or not.  W4 triangle that you and porper sees is non existent.




Just to clarify, I (we) don't think is a wave 4 contracting triangle. I don't even know if it's a wave 4 for that matter. Other analysis presented so far only suggested : 
1/ That at the capitulation of August that we would get a rally that would carry into September. IT HAS and also suggested the index may move to 5400/5500.
2/ Cycles suggested that this was not a contracting triangle but most likely an abc or zig zag with intermediate contracting triangle b wave.

On that basis it was a solid argument  to build a case for a long and short term swing trade. In the end however my opinion does not decide what is a good opportunity. *My rules do (right or wrong)*

After this move (if it goes as expected) I have no idea what the next move will be, however the market will tell us what it wants to do eventually


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## Triathlete (17 September 2015)

gartley said:


> I have no idea what the next move will be, *however the market will tell us what it wants to do eventually*




Exactly.....Trade on what you See not what you think.......!!


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## Porper (17 September 2015)

gartley said:


> Just to clarify, I (we) don't think is a wave 4 contracting triangle. I don't even know if it's a wave 4 for that matter.
> After this move (if it goes as expected) I have no idea what the next move will be, however the market will tell us what it wants to do eventually




The patterns on the XAO are difficult to decipher from an Elliott Wave point of view. I'll say again that The Wave Theory isn't the be all and end all of technical analysis. 

You have to know when to use other tools in the toolbox. Now is that time...at least for me. That said the whole world is watching and waiting for the Fed's decision overnight so short-term anything can happen. Could just as easily be a big yawn though. This would be the best scenario I reckon.


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## PennD (17 September 2015)

Porper said:


> Can anybody spot the big mistake with this chart? Clue...a series of first and second waves...to where?




To about -2000


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## Porper (17 September 2015)

PennD said:


> To about -2000




Assuming wave-3 will travel at least 1.618x wave-1 (the norm) then the target is 1264. But that will only complete a normal third wave. Then we have waves-4 & -5 to come. Wave-5 will normally be the same length as wave-1 meaning...we almost run out of numbers. It's impossible to get a normal 5-wave Elliott pattern down the way that chart is labelled.

Assuming wave-4 will be shallow (expected) then we are looking at a target roughly around 200 (yes two hundred).  We'll all need guns to guard our vege. patches before that happens!


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## gartley (17 September 2015)

PennD said:


> To about -2000




Exactly!!!   If we are about  to enter 3 of 3 of 3 (point of recognition), the mid point of the whole move from the 5200 then it's headed for a "China Syndrome" 

Actually if anything, it appears almost ready to start the largest counter trend rally since the decline started from 5200. And if it isn't, then it's high probability that downside is limited from current levels to only another 5-7% max

So if anything the last series of 1-2's should be labelled opposite.
The market has ALREADY crashed for now. Most likely it will fall to lower levels in the longer term.


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## Porper (18 September 2015)

Porper said:


> You have to know when to use other tools in the toolbox. Now is that time...at least for me. That said the whole world is watching and waiting for the Fed's decision overnight so short-term anything can happen. Could just as easily be a big yawn though. This would be the best scenario I reckon.




The big yawn appears to have been the end result of the Fed's decision to leave rates alone.

U.S markets closing almost flat with no more volatility than has been seen recently. A good result in regard to the patterns.

The big "crash" some were predicting today proved to be utter rubbish. Patterns and projections remain unchanged. Still scope for a bounce. Bearish trigger (late August low) still valid though.


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## Trembling Hand (18 September 2015)

Porper said:


> The big "crash" some were predicting today proved to be utter rubbish.




You can always claim latter that it was just a "social experiment".


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## Porper (18 September 2015)

Trembling Hand said:


> You can always claim latter that it was just a "social experiment".




No doubt somebody tonight will be saying exactly that...can't wait.


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## PennD (18 September 2015)

Porper said:


> No doubt somebody tonight will be saying exactly that...can't wait.




IMHO there is no need to poke the dragon... 
We would all benfit from this


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## Porper (18 September 2015)

PennD said:


> IMHO there is no need to poke the dragon...
> We would all benfit from this




It was tongue in cheek. 

Trust me,I have no wish to talk about social experiments or crashes that have been postponed because of...whatever reason. I can't be arsed explaining myself anymore so purely on topic... patterns etc. 

With this in mind a nice turnaround so far today...the bounce is still on course. Close above yesterdays high would be good. Then a rally into the 5446 - 5567 zone as a minimum. That's the next inflection point.


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## Porper (24 September 2015)

rimtas said:


> Your understanding of EW is rubbish.




Thanks Rimtas. I thought I was going wrong somewhere. Good to see you back.




rimtas said:


> I do not know how you make money.




No, well you never will know either. I do this for a job...so obviously do make a living. Put in the hard work and you too could do this for a living Rimtas. Oh, I forgot... you said Day Traders will always lose in the end.


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## rimtas (24 September 2015)

Trading for a living is dream. So if you declare you are living from it you must be in one of the 2 categories:

1. You are the dreamer, always failing in life and realizing your dreams only in social media.

2. You have been in the markets for decades and know how it behaves. From you posts I don't see anything supporting this case.



I do not trade for a living. I still have not been able to determine the best strategy to come home and say to my wife and kids-hey, no lunch today as market went wrong side.  
Saving from the market catching some waves is a good thing and this is quite easy, but daytrading and planning your future everyday expenses from this...well god luck with that. One day I will probably see you on the street with an empty plate asking for meal.


Instead of your analysis, you would better declare your open positions and instead saying XAO will go down, say that you opened a short position on it. Just to make a feel what kind of life is it from trading, you know.


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## Porper (24 September 2015)

rimtas said:


> Trading for a living is dream.




Good on you for admitting you can't trade for a living. You actually aren't too far away. At least you know the absolute basics of Elliott Wave. Another few years study and you could be doing just that. Hang in there and keep plugging away. That's my last reply to you Rimtas... i.m.o. it's not worth the time. Enjoy your trading.


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## rimtas (24 September 2015)

Porper said:


> Good on you for admitting you can't trade for a living..



The earlier you admit this, the earlier you start making money from markets. Stop saying to youself that you can. Just make it happen.

Look Porper, I show you the chart of crash epicentre-France. I labelled it under your EW. How would you make a profit using your different count? Just prove your point.


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## rimtas (25 September 2015)

I think I just found more reliable indicator to determine short term movements. One is Foolish, working quite good, as they publish newsletters almost each day and at the extreme of the small wave they write of what the opposite must be done. 
Another is porper. I will call it a Porper Indicator. Though he claimed that he trades for a living, but this kind of herding and extrapolation of short term moves must leave him hungry. Yeasterday was the confirmation of the wave bottom that ended, as Porper indicator turned bearish, confirming that the rebound is underway. 

The best way to determine where and when this rebound ends is to look at the wave structure, read Foolish letters and wait maybe Porper will step out with some bullish forecast as this will be the last highest point to load up on shorts.

Chart is of US Russell 2000


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## Trembling Hand (25 September 2015)

Do we really need such a Muppet in this community? If this guy was a dog in the village it would have been euthanised to the cheers of everyone a long time ago. It just makes this place unpleasant.


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## tech/a (25 September 2015)

Trembling Hand said:


> Do we really need such a Muppet in this community? If this guy was a dog in the village it would have been euthanised to the cheers of everyone a long time ago. It just makes this place unpleasant.




Yes I agree.
Personal rubbish.


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## sinner (25 September 2015)

Trembling Hand said:


> Do we really need such a Muppet in this community? If this guy was a dog in the village it would have been euthanised to the cheers of everyone a long time ago. It just makes this place unpleasant.




Come on man! How valuable is a forecast like "the crash is coming last Monday but there will also be a rally to all time new highs soon to shake out those predicting a crash" which aren't forecasts but actually sentiment experiments with us as the subjects?

:run:



tech/a said:


> Yes I agree.
> Personal rubbish.




So how come last time we called rimtas out on it, you designated us all a pack of fundy wolves who should lay off? Makes it look like you're not paying attention tech.



tech/a said:


> You know
> WOW could make $10
> Was $5 not all that long ago.
> 
> ...






tech/a said:


> Your like a school bully Mc Muffin.


----------



## Gringotts Bank (25 September 2015)

sinner said:


> which aren't forecasts but actually sentiment experiments with us as the subjects?




I used to run covert sentiment experiments on HC.

They only tend to work at the extremes (high and low).  

I stopped because they weren't really ethical.  One has to be prepared to mess with peoples' confidence and guage reactions.  It can cost people more than just their money.

edit:

HC is an interesting place if anyone's not visited it.  It's like the Wild West!  You've got heaps of small retail traders who fly by the seat of their pants, a couple of huge whales who enjoy the micro cap thing.  There's a number of skilled FA guys, but no one really good at TA.  A few jokesters.  Too much political commentary for my liking and quite a few conspiracy theorists!


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## Porper (25 September 2015)

rimtas said:


> I think I just found more reliable indicator to determine short term movements. One is Foolish, working quite good, as they publish newsletters almost each day and at the extreme of the small wave they write of what the opposite must be done.
> Another is porper. I will call it a Porper Indicator. Though he claimed that he trades for a living, but this kind of herding and extrapolation of short term moves must leave him hungry. Yeasterday was the confirmation of the wave bottom that ended, as Porper indicator turned bearish, confirming that the rebound is underway.
> 
> The best way to determine where and when this rebound ends is to look at the wave structure, read Foolish letters and wait maybe Porper will step out with some bullish forecast as this will be the last highest point to load up on shorts.
> ...






tech/a said:


> Yes I agree.
> Personal rubbish.




Looks like I have my very own stalker...I feel like a movie star Difficult to post any analysis though with this guy refreshing pages and replying with nonsense within seconds. I believe he is mentally ill so if the mods think he is good for business I'll leave it to you. Shame it's come to this after over 10 years on here.


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## CanOz (25 September 2015)

Porper said:


> Looks like I have my very own stalker...I feel like a movie star Difficult to post any analysis though with this guy refreshing pages and replying with nonsense within seconds. I believe he is mentally ill so if the mods think he is good for business I'll leave it to you. Shame it's come to this after over 10 years on here.




Porper, you've been a long standing member since 2004 and a member that always presented your analysis in the most unbiased way possible. You've never pushed your analysis onto anyone else, you've always been super polite as well. 

This tosser comes along and insults everyone with an alternative view, he's always looking for an argument, he's simply an internet troll and he should be banned.


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## Trembling Hand (25 September 2015)

Porper said:


> Looks like I have my very own stalker...I feel like a movie star Difficult to post any analysis though with this guy refreshing pages and replying with nonsense within seconds. I believe he is mentally ill so if the mods think he is good for business I'll leave it to you. Shame it's come to this after over 10 years on here.




Put him on ignore Porper. You are right he has some issues that he seems unable to control. I suspect he will soon be gone as he just cannot help himself. Its funny how EW attracts some of the real crazies.


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## Gringotts Bank (25 September 2015)

Gringotts Bank said:


> I used to run covert sentiment experiments on HC.




Sounds a bit like black ops the way I put it!  

All it amounted to was what contrary posters do naturally.  The only difference was I'd analyze the reactions.  There was a guy on HC called meerkat - used to do it all the time!  Everything he said was against the trend!  All very funny until he starts saying your stock is going to fall 50%!

Ahh, forums.


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## Porper (25 September 2015)

Trembling Hand said:


> Put him on ignore Porper. You are right he has some issues that he seems unable to control. I suspect he will soon be gone as he just cannot help himself. Its funny how EW attracts some of the real crazies.




You are correct there T.H. There have been several on here over the years. Some with multi-nicks. Elliott Wave is so discretionary and open to interpretation that I think it just causes conflict. Everybody thinks their analysis is correct...me included I have to admit.

Thanks CanOz, I wouldn't shove Elliott Wave down anybody's throat. As much as I think it's a good tool to have in the box it doesn't make you the money.


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## PennD (26 October 2015)

gartley said:


> Rimtas.
> 
> Any reference to earlier posts/views are used as points of reference to facilitate analysis of current views/analysis.
> Sometimes it's 5-6 months since that earlier post and it's taken all that time for the market move to play out. Readers will not remember a post from 6 months earlier.
> ...




Hi Gartley, well we're in the zone you mentioned above, maybe a little over in time but price is spot on.
Im looking for a reversal this week lasting a good 6 weeks or so. Would love to know what your cycles are saying.
Hope your well


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## gartley (26 October 2015)

PennD said:


> Hi Gartley, well we're in the zone you mentioned above, maybe a little over in time but price is spot on.
> Im looking for a reversal this week lasting a good 6 weeks or so. Would love to know what your cycles are saying.
> Hope your well




Hello PennD. Yes we over ran September and the way it looks now the rally may carry into November as seen buy the Delta Fixed cycles attached. I have also added the daily cycles analysis and they suggest no top yet but rather a continuation of the uptrend after the correction that started today completes. Cycles suggest the final top for this leg should carry to 5500+

The  correctiont hat started today was evident on the 1 hr and 5 hr bar cycles but I have only attached the daily cycles.

Cheers


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## gartley (28 October 2015)

Just adding and updating last the last post.  The Delta time cycles in that post suggest red point 8 and a possible termination of the rally. These cycle points are only a guide, and whilst sometimes they can be bang on, quite often actual cycle points occur some days/weeks well before (especially if it's a major pivot) and other some other after. This is due to left/right hand translation of cycles.
Taking that cycle point 8 at face value relative to earlier point 8 cycle points it should be 3rd week November. 
At this point in time it's probably hard to believe and that is why other methods need to be used to give more confidence.
For me until such time that the cycles are topping on the daily cycles charts as well as price reaching an extreme( both of which have not happened yet), then I will remain bullish. Once these conditions are met then maybe it's time to start looking at the time factor in more detail.
I have attached a chart of the AUS200 showing a potential Gartley pattern setting up on the daily. The pattern is not as symmetrical as I would like,  however it does give a probable termination of 5500+ which similar to what the cycles projection suggests.


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## PennD (28 October 2015)

gartley said:


> Just adding and updating last the last post.  The Delta time cycles in that post suggest red point 8 and a possible termination of the rally. These cycle points are only a guide, and whilst sometimes they can be bang on, quite often actual cycle points occur some days/weeks well before (especially if it's a major pivot) and other some other after. This is due to left/right hand translation of cycles.
> Taking that cycle point 8 at face value relative to earlier point 8 cycle points it should be 3rd week November.
> At this point in time it's probably hard to believe and that is why other methods need to be used to give more confidence.
> For me until such time that the cycles are topping on the daily cycles charts as well as price reaching an extreme( both of which have not happened yet), then I will remain bullish. Once these conditions are met then maybe it's time to start looking at the time factor in more detail.
> I have attached a chart of the AUS200 showing a potential Gartley pattern setting up on the daily. The pattern is not as symmetrical as I would like,  however it does give a probable termination of 5500+ which similar to what the cycles projection suggests.




Thank you for your detailed reply Gartly! 
Please check your messages

Cheers


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## gartley (30 October 2015)

Just following on from the last post where I posted a developing bearish Gartley pattern on the XAO.

As mentioned in that post this pattern appears to be not symmetrical for my liking, however I posted it anyway because it's potential termination lined up nicely with my cycles termination for this leg up.
I should make a note here and mention that price will reach an extreme at 5500+. We should have some sort of correction, but how much of a correction remains to be seen because there maybe a larger cycle in play of higher degree that is more bullish.
As such as mentioned in that post I will remain bullish despite the correction of this  last week. To add weight to this argument I have attached some charts of BHP which is the biggest heavyweight mining stocks. If the conclusion made from these charts is correct we should have a very good 2-3 months on the Aussie market for the miners.
BHP is showing a nice symmetrical bullish Gartley on the monthly chart with good upside potential. And zooming in on the daily chart we also have an inverted H and S pattern that might be developing but need a confirmed higher lower from the the last major low to confirm. All in all I think it maybe a good setup that offers a very good R/R (Risk is only only $1.50 for a potential initial reward of over $7 with a stop just under $21.55.

More importantly the market might have a more bullish tone in the coming months.  Ofcourse if the market falls through 21.55 in a big way it's invalidated Time will tell.....


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## Porper (31 October 2015)

gartley said:


> Just following on from the last post where I posted a developing bearish Gartley pattern on the XAO.
> 
> As mentioned in that post this pattern appears to be not symmetrical for my liking, however I posted it anyway because it's potential termination lined up nicely with my cycles termination for this leg up.
> I should make a note here and mention that price will reach an extreme at 5500+. We should have some sort of correction, but how much of a correction remains to be seen because there maybe a larger cycle in play of higher degree that is more bullish.
> ...




Nice pickups Gartley. Let's see if the Santa rally can give a helping hand.


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## PennD (4 November 2015)

gartley said:


> Just following on from the last post where I posted a developing bearish Gartley pattern on the XAO.
> 
> As mentioned in that post this pattern appears to be not symmetrical for my liking, however I posted it anyway because it's potential termination lined up nicely with my cycles termination for this leg up.
> I should make a note here and mention that price will reach an extreme at 5500+. We should have some sort of correction, but how much of a correction remains to be seen because there maybe a larger cycle in play of higher degree that is more bullish.
> ...




Nice analysis gartley.. I've been away all long weekend with no reception. Back and refreshed will be following closely


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## gartley (4 November 2015)

Thanks Penn D. I am optimistic it will move in our direction. Thankfully market rally has decided to persist after correction but cycles always suggested it would

Looks like the EW bears have gone into a long hibernation......


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## PennD (11 November 2015)

gartley said:


> Thanks Penn D. I am optimistic it will move in our direction. Thankfully market rally has decided to persist after correction but cycles always suggested it would
> 
> Looks like the EW bears have gone into a long hibernation......




Well the dam burst on that pattern. Flooded out the bears from hibernation... 
who am i when i trade on the misfortune of others? 
Is it all really just numbers on a screen...?


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## gartley (13 November 2015)

PennD said:


> Well the dam burst on that pattern. Flooded out the bears from hibernation...
> who am i when i trade on the misfortune of others?
> Is it all really just numbers on a screen...?




Yeah sure did!! Blew the short term  H&S pattern out of contention but that's trading.  However one pattern becomes violated and a new one arises. Now we have a larger long term 5 wave structure that maybe ending with BHP capitulating into a possible low along with other blue chips ending in 5 wave structures.

Thankfully the very long term Gartley is still valid and the 89 month cycle count from all time high till now is still in play. Took another stab after the earlier stop out.

Have attached the AUS200 5hr cycles and Delta fixed term MTD cycles. They suggest a low between now and mid next week although no buy signal triggered yet  but getting close. Around 4970 might to it. Price ideally should reach lower boundary first but does not always happen


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## zzaaxxss3401 (15 February 2016)

I love it how, when there are clear indicators of market direction, that this thread is full of activity. However, when there is uncertainty or lack of indication, there are no "suggestions" or "predictions" forth coming.

Any of the EW'ers keen to shed some light on where the market is heading / headed? Anyone able to put a chart up with possible market plays? Thank you.


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## Porper (15 February 2016)

zzaaxxss3401 said:


> Any of the EW'ers keen to shed some light on where the market is heading / headed? Anyone able to put a chart up with possible market plays? Thank you.




First of all the focus should be on the 50-61.8% retracement zone as shown. If that fails to hold then the triangle is going to be the corrective pattern of choice. It could take longer to unfold than depicted here. This would be the most bullish trajectory. No Armageddon as far as I can see.


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## Triathlete (15 February 2016)

At this stage looking for the XAO to continue towards 4500.It is all down at the moment.


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## Boggo (15 February 2016)

Beware of the bounce !

(click to expand)


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## OzWaveGuy (28 December 2018)

A very interesting picture that's recently developed on the XAO, which may be a key pattern to the long climb from the 2009 low....


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## gartley (28 December 2018)

OzWaveGuy said:


> A very interesting picture that's recently developed on the XAO, which may be a key pattern to the long climb from the 2009 low....



Completed impulse wave down and now wave a of an abc up?


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## OzWaveGuy (15 January 2019)

OzWaveGuy said:


> A very interesting picture that's recently developed on the XAO, which may be a key pattern to the long climb from the 2009 low....




The first leg of an upwards correction should be near completion.... assuming for an a-b-c flat or zigzag correction that takes the XAO to a 50% or 61.8% retrace before continuing downwards...


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## OzWaveGuy (26 February 2019)

OzWaveGuy said:


> The first leg of an upwards correction should be near completion.... assuming for an a-b-c flat or zigzag correction that takes the XAO to a 50% or 61.8% retrace before continuing downwards...




The XAO hit a 78.6% retrace before breaking to the downside of the long channel. The significance of this move should reveal itself quickly if the upwards corrective pattern has come to an end.
.


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## OzWaveGuy (24 March 2019)

There is an expectation of a decline on the XAO with the break of the upward trending channel. If the decline is aggressive and breaks below the 5500 level in less time than the upwards corrective push took to form, then this will strongly signal that the bears are back in control. Looking now for a 5 wave decline with an initial trend channel drawn until a clear short term trend develops.


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## OzWaveGuy (21 May 2019)

With a break above the high set in August, the larger picture needs to be assessed even though a 5 wave decline was clearly visible (most likely a 'c' leg of a expanded flat). For the short term, further upside looks likely with a 5 wave push upwards underway to finish the C leg of the 2nd A-B-C zig-zag correction. As the XAO approaches (or even breaks) the high set in 2007 it should bring an end to the long running/slow developing upwards complex correction to complete a large double zig-zag corrective wave on the weekly chart.


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## OzWaveGuy (3 June 2019)

On the short term wave count, there is a possibility for an ending diagonal for the last push up towards the XAO high on the hourly chart that would finish off the larger C wave. The MACD and RSI have been divergent on the daily chart since late Feb, these momentum indicators typically peak at the top of a 3rd wave (and esp wave 3 of 3) and provide clues that a corrective 4th wave is forming. A push up from here is needed to complete the ending diagonal, a 5th wave, else a more bearish scenario could be unfolding.


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## OzWaveGuy (11 June 2019)

The push up should be close to completion, however, I suspect that this last lingering wave, a 5th of a 5th, might take more time to finish. Hence, an ending diagonal for this wave is also a possibility too. The reason more time is required for completion is the evidence that the DOW is completing wave D of an expanded triangle which needs to push up a little further to also complete before a large wave E decline. Hence, the markets (actually, the social mood) appear to be somewhat in sync at the moment.

The hourly chart below approximates what could unfold...


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## OzWaveGuy (17 June 2019)

The XAO continues to exhibit a 'terminal impulse' pattern (aka ending diagonal) with wave (i) of the 5th wave complete and wave (ii) down underway, maybe to around the 6500-6533 range. This zoomed in hourly chart shows the details of the smaller waves within the larger wave 5 (from June 3rd) with approximations of what this terminal impulse could look like. Obviously a significant departure from the stated pattern would reduce the priority of this final terminal impulse pattern (eg if significant top is already in).

It should be noted that there are x2 terminal impulse patterns underway, a 'assumed' smaller 5th wave terminal impulse as waves (i)-(v), which makes up wave v of the larger waves i-v, also a terminal impulse. The smaller terminal impulse could also trend sideways and overlap the lower ii-iv trend line, thus a new high would fail to materialise.


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## Joules MM1 (17 June 2019)

OzWaveGuy said:


> The XAO continues to exhibit a 'terminal impulse' pattern (aka ending diagonal) with wave (i) of the 5th wave complete and wave (ii) down underway, maybe to around the 6500-6533 range. This zoomed in hourly chart shows the details of the smaller waves within the larger wave 5 (from June 3rd) with approximations of what this terminal impulse could look like. Obviously a significant departure from the stated pattern would reduce the priority of this final terminal impulse pattern (eg if significant top is already in).
> 
> It should be noted that there are x2 terminal impulse patterns underway, a 'assumed' smaller 5th wave terminal impulse as waves (i)-(v), which makes up wave v of the larger waves i-v, also a terminal impulse. The smaller terminal impulse could also trend sideways and overlap the lower ii-iv trend line, thus a new high would fail to materialise.
> 
> View attachment 95516




please show us your "alternate" labelling

todate, specifically where you have annotated "iii" does not conform to a simple up-down-up sequence typical of an ending diagonal wedge, the fib grid is as valid for the pullback in a standard impulse leg so it does not validate either way - an alternate way to count the price action, we can call it in 1's and 2's, in other words, at this juncture, the pattern could be calling for an acceleration to the upside,  given that all degrees of trend are active at all times the alternate count you decide on could also give you an insight into the next level of probability

thanks


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## OzWaveGuy (21 June 2019)

The latest XAO push up has touched the upper bounds of a 10yr trendline and has most likely invalidated the small terminal impulse pattern on the hourly chart discussed previously. Instead, the XAO moved a little quicker that anticipated and has now reached the critical point as discussed on 21st May. The larger terminal impulse pattern, wave 5, from Jun 11th looks complete with some potential to 'throw over' the long term trendline.  The DOW is also approaching critical levels for the ending of a wave D up in a large expanded triangle, another 50-200 point push up would be all that's needed. Wave E down would need to kick in and could take the DOW to the sub 20,000 levels. 

XAO weekly


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## OzWaveGuy (21 June 2019)

Joules MM1 said:


> please show us your "alternate" labelling




let's see what happens in the next week or so, now that some critical levels are in play


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## OzWaveGuy (28 June 2019)

OzWaveGuy said:


> ... the XAO moved a little quicker that anticipated and has now reached the critical point as discussed on 21st May. The larger terminal impulse pattern, wave 5, from Jun 11th looks complete with some potential to 'throw over' the long term trendline.




Looking at the short term structures, I wouldn't be surprised if the XAO and DOW both push higher for the short term and the XAO 'throws over' the long term upper channel trend line


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## OzWaveGuy (4 July 2019)

The XAO continues to push higher, commencing the 'throw over' of the long term trend line as discussed in the last post, approaching the all time high at 6863. The latest a-b triangle wave structure on the hourly chart implies that an end to the current short term trend is at hand. The 4 waves (1-4 labelled) look close to completion with a push up to complete wave 5. 

Once complete in the next few days, be alert for sudden moves to the downside that break the supporting short and medium term trend lines. A powerful push to the downside is needed to confirm a top may be at hand to unwind the index.

The DOW also needs to push up above the high set in Oct 2018 to complete wave D of an expanding triangle. It too has a completed 4th wave triangle on the hourly chart that implies a change in trend is at hand at least for the the short term - both indexes remain in sync for the short term trend. 

XAO Hourly


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## OzWaveGuy (6 July 2019)

OzWaveGuy said:


> ....The DOW also needs to push up above the high set in Oct 2018 to complete wave D of an expanding triangle. It too has a completed 4th wave triangle on the hourly chart that implies a change in trend is at hand at least for the the short term - both indexes remain in sync for the short term trend.




The Dow has pushed an all time high (barely), so technically wave D could be considered complete (see image below). However, the short term wave structure on the 15min chart seems unclear leading me to believe there is still some gas left in the tank for a couple of days of cruising in the desert.

As for the XAO, the decade long corrective push upwards looks complete, so the guidance in the last post remains...watch the your supporting trendlines at multiple timescales (eg channel lines as shown) - should each fail to hold then this is a good sign that a trend change at an increasing level of wave scale is occurring. Same can be done with individual stocks.

XAO Hourly 
	

		
			
		

		
	





Expanding Triangle.


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## OzWaveGuy (13 July 2019)

The XAO should push up close to the 6850 level before a reversing under the current Wave scenario discussed previously. There is confidence that a push up needs to reverse since there is a triangle formation on the 30min chart (shown), triangles indicate a change in trend for that specific wave scale. Breaking above 6850 could imply that the XAO has further to go (not by much) and a larger alternate count 4th wave triangle may be forming.

XAO 30min
	

		
			
		

		
	




The expanding triangle on the  DJI that started at the beginning of last year looks a lot neater with the recent DJI push up into blue sky territory. I can also see 5 small waves complete on the hourly chart. 
Next week could be interesting. 

The XAO and DJI need to fall with strength to help confirm that a change in trend is commencing.

DJI Weekly


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## OzWaveGuy (16 July 2019)

The XAO is moving without strong conviction at the moment, possibly due to a corrective flat pattern currently unfolding ( a 3-3-5 wave ) with wave c  (a 5 wave pattern) yet to complete. The short term low at 6727 has yet to be broken in less time that the 'a' wave took to form, hence there is supporting evidence that there is still more to go for this a-b-c corrective wave. 

The alternative count still supports a 4th wave triangle, and we should know very soon if this is the case. If the c wave completes as shown and the 6727 level is then broken, this would give supporting evidence for the primary wave count and further declines. 

XAO 15min


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## OzWaveGuy (20 July 2019)

The XAO action this week gives a growing emphasis to an almost complete 4th wave triangle shown on the 30min chart.  The lack of conviction of downside action and the inability of the index to drive below the 6727 level in less time than the 'a-wave' took to form (covered in the last post) implied corrective action was still underway (for the bearish view) or a bigger correction was unfolding (for the bullish view). The bullish view is a 4th wave triangle that needs to complete the 'E' wave and then to push up above the 6850 level to complete a wave 5.


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## OzWaveGuy (24 July 2019)

With a 4th wave triangle looking complete and a small set of 4 waves up and the 6850 level broken, the XAO is heading upwards to potentially test the upper channel line. Under EW, the 5th wave has some limits since the 1st wave was the extended wave and the 3rd wave can never be the shortest wave, hence wave 5 cannot travel more than wave 3.

Again, triangles represent an ending of the current trend and there are guidelines on what usually follows a triangle, eg, wave 5 may be 100 - 161% the height of the triangle. So a 161% push after the end of the triangle E wave would place the index on 6975 and about where the upper channel line is.

Since there is a lot more clarity, this whole segment is labelled to show wave 1 as an extended wave, wave 3 is shorter and is segmented like wave 1 and wave 5 yet to complete with a potential top around the 6975 area. I should also add, at the 6975 level, wave 5 would be 38.2% of wave 3,so this area could be an area of strong resistance.

XAO Hourly


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## OzWaveGuy (26 July 2019)

The XAO appears to be in the process of completing a small wave ii. Once complete, channel lines can be added for this last push upwards for waves iii - v. Dropping under the end of the last 4th wave triangle (wave 4) would indicate a top is in.


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## OzWaveGuy (30 July 2019)

The push towards the 6975 target area continues with the development of smaller waves that further define this last leg up. An approximation of what could unfold on the index is suggested below, however, what's important is to be on alert to a strong break downwards that drives below the series of previous 4th waves at ever larger degrees of scale.

XAO 30min


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## OzWaveGuy (31 July 2019)

With today's action, there's possibility that the XAO is moving upwards in waves of 3, suggesting an ending terminal pattern could be forming.

XAO 15min



The DOW appears to have 1 more push up to complete a 5 wave advance, although there are several  interpretations for this wave structure including a bearish one. The good news is the ongoing consolidation of the DOW between the 27,060 and the 27,370 levels (shown as a wave 4 triangle) will break out shortly.

DOW 60min


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## OzWaveGuy (1 August 2019)

With the recent XAO action, the case for the anticipated 'top' of a 10yr upwards correction needs to be reviewed slightly earlier than previously documented. The 4th wave triangle is reviewed to have the 'e' wave ending sooner with following structure of waves i to v looking a lot better for this move (eg wave 'i' is almost equal to wave 'v' and wave 'i' is 61% of wave 'iii').

The push up from the wave 4 triangle is just over 161% of the triangle height, as anticipated, and is usually a good guide to follow. Validation of a larger decline is now required as previously discussed.

XAO 30min


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## willoneau (1 August 2019)

OzWaveGuy said:


> With today's action, there's possibility that the XAO is moving upwards in waves of 3, suggesting an ending terminal pattern could be forming.
> 
> XAO 15min
> View attachment 96504
> ...



Hi OzWaveGuy , do you have any daily charts as I noticed that they seem like 30 min or 60 min?


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## OzWaveGuy (2 August 2019)

willoneau said:


> Hi OzWaveGuy , do you have any daily charts as I noticed that they seem like 30 min or 60 min?



Hi, will sometimes use a daily view, but I find the daily charts don't provide enough detail. If you want a longer term view you can check out this weekly view. The rationale on using 60, 30, 15min charts is for those critical junctures and esp identification of triangles since they are critical in pinpointing the end of trends at different levels of timescale.


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## willoneau (2 August 2019)

With your EW are you using it to trade in those smaller time frames?


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## OzWaveGuy (3 August 2019)

willoneau said:


> With your EW are you using it to trade in those smaller time frames?



Not in recent months. Options and CFDs are attractive to me for short term, long term I want to see where we are going


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## OzWaveGuy (3 August 2019)

As a side note on the DOW, the  anticipated expanding 4th wave triangle is in a final leg down - wave 'e'. Expanding triangle 'e' waves are almost always the longest and can relate to wave 'a' by the Fibonacci relationship of 161 - 261% and they are also the most complex.

The upwards wave '5' thrust out of the triangle can also fail to reach new highs, regardless, there's going to be a 'bounce once wave 'e' approaches/reaches/drives below the target area. Wave 'e' can possibly drop below 20,000 to head down to 261% of wave 'a' (not shown). Also note the volume as each wave starts/finishes, eg the start of wave 'e' shows an increasing volume in the first several days.

The reason for this post is: the XAO and DOW often are in sync, and lately they have been. I anticipate the DOW will be hard to follow on the way down as it already appears to be declining in waves of 3. In contrast, the XAO 'should' decline in waves of 5 (currently underway) but, like the DOW, could also be hard to follow.

DOW Daily


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## OzWaveGuy (5 August 2019)

The XAO has broken thru the previous 4th wave triangle and is sitting in the middle of the 4th of 4th (wave iv) at the 6710 level, and it is usual to expect some consolidation in these areas. 

Based on an initial view, I have temporarily labelled wave (i) and (ii) with wave (iii) underway. There could be further declines since the unfolding wave (iii) down is so far only approx 100% of wave (i) when the expectation is usually 138% or 161%. 

The decline is yet to break thru the short term parallel channel lines (not shown), that will help confirm a bigger move is unfolding.


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## willoneau (5 August 2019)

Hi OzWaveGuy, just eye balling the XAO , my thoughts- with strong move up from beginning of year i suspect maybe a pull back to 6400 or 6200 max. If we are still in a bull run, i remember reading some were sep-oct not usually bullish months. That is if this is a pullback happening or just Monday nerves. Taking out previous top by quite a bit has me still bullish at moment anyway.


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## OzWaveGuy (6 August 2019)

willoneau said:


> Hi OzWaveGuy, just eye balling the XAO , my thoughts- with strong move up from beginning of year i suspect maybe a pull back to 6400 or 6200 max. If we are still in a bull run, i remember reading some were sep-oct not usually bullish months. That is if this is a pullback happening or just Monday nerves. Taking out previous top by quite a bit has me still bullish at moment anyway.



It's possible. Are you using ElliottWave for this analysis?


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## OzWaveGuy (6 August 2019)

Some further clues today as the XAO drives down below the two most recent triangles and breaking below the channel lines that encapsulated the most recent leg up to the top. In the chart below, the assumed wave (iii) is 261% of wave (i), a bit more than the expected 161%. As you can start to see, Fibonacci relationships exist in a multitude of ways in the waves.

This leg down forms a wave action at the next larger degree to the waves we've been reviewing in the recent hourly charts, hence, how this down leg develops will provide additional clues to a bigger picture - which I contend is down.

A small wave (v) down needs to develop, perhaps to bounce at the 6500 level to complete a first major leg down before correcting upwards.

XAO 15min.


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## willoneau (6 August 2019)

OzWaveGuy said:


> It's possible. Are you using ElliottWave for this analysis?



Nope but i did study it a few years ago.


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## OzWaveGuy (8 August 2019)

It's possible that wave (iv) is now complete as a flat correction (made up of a 3,3,5 internal wave structure). Also the 38% retrace has been met - common for wave 4's and the MACD is usually at an extreme at the end of wave 3's. 

A drop down to complete wave (v) into the 6500 - 6450 levels would provide some useful clues to a potential corrective bounce. There are also other interpretations such as: the corrective bounce is already underway with wave (v) down already completed.


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## OzWaveGuy (13 August 2019)

Looking at the most recent corrective XAO action on the 15min chart, there is a possibility corrective wave '2' up is developing or has finished. This means the small waves (i)-(iv) are relabeled to show an extended wave (v). Corrective waves often retrace to the previous wave 4, in this case there could be further corrective action upwards into the vicinity of wave '(iv)' at the 6840 level.

Should the index break down and pass the end of wave '1' faster than the corrective push up took to develop, then this is a indicator that the next leg down is most likely underway.


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## Boggo (13 August 2019)

Not a very convincing pattern but, is ~7000 a possibility ?

(click to expand)


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## OzWaveGuy (15 August 2019)

Boggo said:


> Not a very convincing pattern but, is ~7000 a possibility ?



It's possible


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## OzWaveGuy (15 August 2019)

There is an expectation under the current EW count for a strong move downwards for the XAO. Wave 3's are usually powerful waves and will move to about 161% of a 1st wave - which could place the index at around the 5940 level before wave 4 forms.

Corrective wave 2 is made up of two a-b-c corrective patterns joined by an 'x' wave, making it hard to follow. Wave 2 only retraced 38%, showing weakness in the index. The expectation is for further declines over the next several weeks as wave 3 unfolds. 

The alternative view is that the index has completed/almost completed an A-B-C correction down and there is always a possibility of a push up above the XAO high - unlikely, unless evidence comes into view that something else is unfolding.


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## sptrawler (15 August 2019)

OzWaveGuy said:


> It's possible



The fundamentals of the Australian market still appear pretty good, as usual we are being driven by overseas sentiment. IMO
The only good thing is, Donald can turn things around with a tweet, as he has done before. If that were to happen there is a lot of money to be made, not that anyone would take advantage of a scared herd mentality.


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## OzWaveGuy (20 August 2019)

The XAO is correcting upwards forming the next smaller set of waves before the next advance downwards or the larger wave 2 is still forming (as shown) as a flat correction (3-3-5).

The recent push upwards looks more corrective than impulsive at the moment, providing evidence that this is a smaller wave 2 that has formed or is forming.  The next few days should help clarify.


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## OzWaveGuy (21 August 2019)

Since the DJI is correcting downwards in a final wave E of an expanded triangle, the patterns will be hard to follow as they will typically move in waves of 3 with smaller sub-waves showing up as 5's. It's these smaller waves of 5 that can help identify individual legs.

So far, the recent consolidation may be unfolding as a triangle as shown, but there are other interpretations as well. If the DJI hits the 'c?' as below and heads downwards, then this could be a clue to further short term action.


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## OzWaveGuy (24 August 2019)

The DJI continues to follow the makings of a triangle with wave 'd' looking complete, a push up to complete wave 'e' at around the 26,000 level is needed - I wonder what tweet will 'cause' the market to react positively?

Breaking above the triangle a-c line could indicate a more complex correction is unfolding or a wave 2 is the right interpretation instead of a triangle. 

The key atm is the 26k level, more precisely the 26,050 level is a 61.8% retrace of triangle wave 'd'. From there, aggressive declines could unfold in a 5 wave decline.


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## OzWaveGuy (27 August 2019)

Is the XAO now poised for a series of aggressive 3rd waves down? Based on this wave interpretation an aggressive decline is now at hand that could take the index down to the 5950 level (161% of wave 1) to complete wave 3 down.

The alternative interpretations are: wave 2 is still unfolding as a more complex correction which would have further sideways moves to complete a double three correction (unlikely based on the current wave formations) or a triangle is forming that would provide an alternative wave pattern for the larger trend, but a lot more evidence is needed.


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## OzWaveGuy (28 August 2019)

The DOW is also ready to decline after almost precisely hitting the 26,050 level as previously anticipated (61.8% retrace of triangle wave 'd'). Unclear what trump tweet 'moved' the DOW so precisely.

Now that the XAO and DJI are at levels that could see aggressive breakdowns, the boundaries are clear on both indexes (and this includes a break-up for an alternate view). Either way, for the DOW, breaking below the b-d line (or above the a-c line, unlikely) will provide clarity in the next wave action.

The next very small 5 wave decline looks to have unfolded since the completion of triangle wave 'e'


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## OzWaveGuy (31 August 2019)

The XAO has broken out and higher to shed more clarity on the index that was moving sideways and looked more triangular in it's development. This action implies a larger wave '2' correction was unfolding.

The triangular activity is a (B) wave of a larger wave '2' flat correction. The expectation is now for a 5 wave rally up to the 50% or 61.8% retrace of wave '1' down and into the vicinity of the previous wave '(iv)'. As these levels are approached, be on the lookout for a significant break of the wave '(C)' trend line.


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## OzWaveGuy (6 September 2019)

The XAO continues to move upwards and should move into resistance at the 6800 level (approx 61.8% retrace). At this level, a small wave (iv) may develop as shown before a final push up. Parallel trend lines are in place to establish a temporary boundary for this wave formation.


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## OzWaveGuy (11 September 2019)

The XAO appears to be on track to complete a small wave (iv) triangle in the push up to the 6800 level and possibly just beyond. Once complete and under the current wave count, the index should fall. If a strong break down doesn't appear, then this may be a clue to something else occurring. 

The good news is the index is operating within some very definitive boundaries, and when broken, should offer a clear view of the next move (which imo should be a hard fall below the 6500 level).


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## OzWaveGuy (16 September 2019)

The XAO is still slowly moving into position for a what looks to be a final push up.

It appears that a small 4th wave triangle is unfolding (wave iv), before a push up above 6800 takes place. There is also a possibility that this small triangle is already complete and a final push up will take place over the next couple of days.

Wave (iv) appears to have unfolded as a flat correction and not a triangle.


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## OzWaveGuy (17 September 2019)

The small wave 'iv' triangle looks complete with the index finishing above 6800. Technically, wave (C) could be complete and was driven by a post triangle small 5 wave push to 6801.7. 

However, there could still be more upside with post triangle action regularly around 161% of the height of the triangle, thus taking the index to 6832 (and bumping into the underside of the (ii)-(iv) trend line).

Be on the alert for a strong break down


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## Gringotts Bank (18 September 2019)

I also think another jolt is coming.  Not massive though.


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## Gringotts Bank (18 September 2019)

ES daily.  Another ascending wedge.  DYOL.


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## OzWaveGuy (21 September 2019)

Gringotts Bank said:


> I also think another jolt is coming.  Not massive though.



It's certainly possible, there are multiple interpretations I can see atm, however more evidence is needed to bring light to those secondary views


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## OzWaveGuy (21 September 2019)

As discussed in the 31st Aug post, the XAO would most likely retrace into the vicinity of the previous wave 4's, this has now occurred and leaves the XAO at a critical point with wave 'C' up looking rather complete.

Wave '(iv)' has been relabeled to show a long sloping triangle as the sub waves support this interpretation vs what was previously shown. A subsequent 5 wave post triangle push (which is 100% of the height of the triangle) has occurred to mark the completion of wave '2' up.

The trend line now needs to be broken with a possible drop to around the 6750 levels for a pause and then downwards.


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## OzWaveGuy (25 September 2019)

With the break of the trendline, a slight update to the short term XAO wave structure is below....an ending expanding wedge with a small 5th wave failure.

Need to see 5 waves down with force as per previous guidance.


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## OzWaveGuy (2 October 2019)

Is this the beginning of the needed 5 waves that validates the next leg down for the XAO?

The XAO has 'paused' at the 6750 levels, an area of support. Should the XAO break through this level with force as expected with a 3rd wave (in fact wave 3 of 3 down) then this further validates the next moves.

Corrective wave (ii) is a flat correction (3-3-5) that fits nicely within a parallel channel. The full retrace of corrective wave (ii) up is made extremely quickly, indicating the next move down should be underway.


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## OzWaveGuy (11 October 2019)

The XAO has completed or is near completion of corrective wave (iv) up. The next moves should be downwards to the 6570 or 6500 levels to complete wave (v).

As a point to note, the MACD was at an extreme as wave (iii) completed, giving indication wave (iv) was about to start. The MACD should become divergent as the XAO drops below the end of wave (iii), thus warning of impending corrective action upwards (possibly back up to the 6700 levels) as wave (v) down approaches completion .

The boundaries are identified and should the XAO traverse too far outside these boundaries, then some other action may be unfolding, esp if wave (iv) creeps upwards and overlaps wave (ii).


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## OzWaveGuy (19 October 2019)

A short review of the DJI....the DJI has been consolidating over the past few months and has not declined aggressively as expected for wave 'E' of an expanding triangle (although the waves in an expanding triangle are always going to be hard to follow). Shown below are 2 potentials for a wave 'E' decline, the red labels show a '(b)' wave triangle that has completed with a push up to complete wave 'D' of the expanding triangle (maybe to the 28,000 level). Or, wave 'D' has finished and the decline is underway.

We will soon see which boundaries the DJI will break.


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## OzWaveGuy (31 October 2019)

The XAO has continued to labour upwards indicating ongoing corrective action which could have completed at the wave '2' high. Corrective wave '2' is a flat correction (waves in the form of 3-3-5), however, there is still caution to be observed until a clear next leg down unfolds. 

Breaking above the wave '2' high could mean something else is unfolding, possibly at a larger degree.


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## OzWaveGuy (2 November 2019)

It looks like the DJI is taking the red option to complete wave D up (as described in the last post on the DJI). 

A 5 wave push up is needed to hit a estimated upper trend line of the expanded triangle. Waves 1-4 look complete with the last push up consisting of a sub-divided wave 5 that is still unfolding. An approx target area is 27,600. Note that the MACD is at an extreme in a wave 3 of 3 position (red dotted line). The MACD becomes divergent on a stock chart as the last push up completes. Be aware of a strong break below the dotted trend line that could indicate wave E down has started.

So the detail looks like....


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## OzWaveGuy (20 November 2019)

The XAO has laboured up to complete a 5 wave push to complete wave (C) up, thus possibly completing a long drawn out wave 2 correction (or possibly a B wave). Either way, this wave count will take the XAO lower should the key trend lines be broken with force to commence wave 3 down.

Caution is now needed.


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## OzWaveGuy (29 February 2020)

OzWaveGuy said:


> A short review of the DJI....the DJI has been consolidating over the past few months and has not declined aggressively as expected for wave 'E' of an expanding triangle (although the waves in an expanding triangle are always going to be hard to follow). Shown below are 2 potentials for a wave 'E' decline, the red labels show a '(b)' wave triangle that has completed with a push up to complete wave 'D' of the expanding triangle (maybe to the 28,000 level). Or, wave 'D' has finished and the decline is underway.
> 
> We will soon see which boundaries the DJI will break.
> 
> View attachment 98093



I suggest that the last leg down of the expanding triangle is now well underway, after some further sub-dividing of the last leg up. A possible target area is 19500, of which the DOW is half way there...so it may be time for some consolidation at the current levels.


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## OzWaveGuy (7 March 2020)

The DJI appears to be consolidating for the moment with a potential flat correction underway that is most likely only 1 leg of several (on the 15 min chart). Expanding triangles seem to attract triangles and flats in it's sub-waves, hence the (a)-(b) triangle halfway up wave D was a clear indicator that the end of wave D up was approaching. Whether it was Corona virus, a trade spat or a trump tweet, the mainstream media will always attribute a decline to something of convenience. Same for when wave E down completes (possibly at the 20,000 levels), there will be some machination to cling to. News still sells.


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## Logique (8 March 2020)

Thanks OWG, DJIA another -20% to 20,000 would certainly make headlines.
I notice you have been consistent in recent months with this Expanding Triangle prediction -you are not wrong so far.
Looking at the long term trend, 20,000 would not look out of place. And coincidentally, more or less an 11 year EMA:


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## OzWaveGuy (12 March 2020)

The DJI looks to be ready for a bounce soon, based on the strengthening MACD and a strong possibility of a small (4th wave?) expanding triangle (shown) that has formed on the 30min chart. There are several options that could unfold to create a 'mid wave' correction - which may already be underway as a flat correction. There's still room for more downside eg 161% of the expanding triangle height, down to 22900 or below.


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## tinhat (13 March 2020)

Ain't it funky?


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## OzWaveGuy (15 March 2020)

The longer term XAO has completed the corrective action commenced in 2009, being a 'B' wave up of a much larger correction (either a flat or possibly a triangle). The long awaited break (with force) of the support line has occurred and if a flat correction, the expectation is a 5 wave decline into the vicinity of the previous wave 4 of one lesser degree.

Compared with the Dow Jones, the XAO will fail to see new highs, whilst once the DJI completes wave E down of the expanding triangle, new highs should be achievable (assuming there isn't a 5th wave failure). Obviously more evidence is needed, however the high level wave pattern points to rough times ahead for the XAO.

If the XAO unfolds as a flat correct (likely), then it will be an expanding flat, where wave C down (currently underway) can regularly reach 138% of wave B up...making the target area around 1600.




For the shorter term, the XAO daily chart shows a long drawn out push up to complete the last 5th wave segment of corrective wave B up. The strong push down appears to have now completed the 1st wave down. Based on fibonacci relationships (and assuming wave C down is the last wave of a flat correction), the next target area for wave (iii) down should be around 2400. The ultimate target for this major leg down is to bounce on the XAO 120year long term trend line, that is long overdue.

If this is not a flat correction, but instead a triangle, then this leg down will be in 3 waves (not 5) and should reach the 4000 levels before turning up.


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## kid hustlr (15 March 2020)

OzWaveGuy said:


> The longer term XAO has completed the corrective action commenced in 2009, being a 'B' wave up of a much larger correction (either a flat or possibly a triangle). The long awaited break (with force) of the support line has occurred and if a flat correction, the expectation is a 5 wave decline into the vicinity of the previous wave 4 of one lesser degree.
> 
> Compared with the Dow Jones, the XAO will fail to see new highs, whilst once the DJI completes wave E down of the expanding triangle, new highs should be achievable (assuming there isn't a 5th wave failure). Obviously more evidence is needed, however the high level wave pattern points to rough times ahead for the XAO.
> 
> ...




Hi,

To confirm you are seeing the DJI to make new highs but the all ords will go to 1600?


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## OzWaveGuy (15 March 2020)

kid hustlr said:


> Hi,
> 
> To confirm you are seeing the DJI to make new highs but the all ords will go to 1600?




It means the DJI will complete the expanding triangle, head to new highs (wave 5) before turning down. The XAO should also move upwards, but as a corrective wave (eg a wave 2 up) and losing steam, whilst the remaining bulls in the DJI complete the last push up. Both the DOW and XAO should  both head down in a powerful decline.

As the chart below shows, the XAO and DJI have moved very differently since 2009. The DJI has been moving in impulsive moves upwards (bull market), the XAO has been moving in corrective waves upwards (only just making a new high in a bear market correction).


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## OzWaveGuy (17 March 2020)

OzWaveGuy said:


> .
> 
> View attachment 101074




The DJI is approaching the 20,000 target levels, watch for a tweet, fewer Joe Biden gaffs, that will surely turn the market....


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## Logique (17 March 2020)

DJIA to 20,000 was a good call OWG, it could even hit that tonight.

I'm not sure it can't test the lower support zone at ~17,500 to be honest


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## OzWaveGuy (17 March 2020)

Logique said:


> DJIA to 20,000 was a good call OWG, it could even hit that tonight.
> 
> I'm not sure it can't test the lower support zone at ~17,500 to be honest




I don't think 17,500 is achievable, maybe 19,100 as a low, before the DJI rallies. The MACD is building strength on the 15,30, and 60 min charts, so a bottom may not be far off. 

It's little hard to read this leg down to know exactly where a bottom my lie. If I were to have a confident guess, then I suggest the bottom is in (or almost in) with an ending diagonal pattern to complete the (c) leg of the zig-zag correction for wave E down....the giveaway is the small expanding triangle pattern in the wave 4 position that indicates an end to this leg down is close at hand. The ending diagonal pattern is hard to read any other way atm.


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## OzWaveGuy (19 March 2020)

The DJI has made the low target level down to just under 19,000 and has formed an almost perfect wave 4 expanding triangle. Wave E is almost 138% of wave D (which is a little over 138% of wave C), so there are Fibonacci relationships between triangle waves.

The question is, has the market turned with a rally ready to go? Caution is now needed....for the bears. Futures are pointing slightly lower, but the next trump tweet could be a big one ;-)


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## Joules MM1 (19 March 2020)

OzWaveGuy said:


> The DJI has made the low target level down to just under 19,000 and has formed an almost perfect wave 4 expanding triangle. Wave E is almost 138% of wave D (which is a little over 138% of wave C), so there are Fibonacci relationships between triangle waves.
> 
> The question is, has the market turned with a rally ready to go? Caution is now needed....for the bears. Futures are pointing slightly lower, but the next trump tweet could be a big one ;-)
> 
> View attachment 101478




the $dax and $spx are both within the exptremes of prior lower degree 4th wave lows

so, you maybe right, with the words
" Therefore, I shall resign the Presidency effective at noon tomorrow. "

that'd do it


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## OzWaveGuy (23 March 2020)

The XAO continues to decline, but uncovers more clues. 

Wave 'i' is 61.8% of 'iii' - a common Fibonacci relationship. It's possible that wave 'v' will also be roughly the same as wave 'i', making a possible bottom at 4320 for wave 1 down.

The MACD is at an extreme in the wave 'iii' position and is very common with impulsive moves, and helps to confirm that an end to the current wave structure is approaching. A divergent MACD is also additional confirmation that the index could soon turn.


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## satanoperca (23 March 2020)

Just out of curiosity, did Mr Elliot ever back test black swan events?
Or, given all things follow a usual behavior, this current turn of events, is just normal in a timeline of (xxxx).


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## OzWaveGuy (23 March 2020)

satanoperca said:


> Just out of curiosity, did Mr Elliot ever back test black swan events?
> Or, given all things follow a usual behavior, this current turn of events, is just normal in a timeline of (xxxx).



Was the current correction really a surprise? Not sure what back testing is needed....you'll need to read his notes. Either the wave count interpretation is right or its wrong.


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## satanoperca (23 March 2020)

Interesting, so how do you validate a system, was the count right or wrong?
I only ask, I have studied it, think it has some merit, but when a black swan event happens, cannot see how the theory applies, please don't take this response as dismissive.


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## OzWaveGuy (25 March 2020)

The XAO may have reached a bottom.

Wave 'v' may have already reached a bottom and is 38.2% of wave 'iii'. A correction is expected to take the index higher.

The wave count still looks a little awkward in the last leg, but is viable. MACD has been strengthening and there is a breakout of the channel. Based on this wave count expect the index to retrace 50% or 61.8% higher.


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## gartley (25 March 2020)

OzWaveGuy said:


> The DJI has made the low target level down to just under 19,000 and has formed an almost perfect wave 4 expanding triangle. Wave E is almost 138% of wave D (which is a little over 138% of wave C), so there are Fibonacci relationships between triangle waves.
> 
> The question is, has the market turned with a rally ready to go? Caution is now needed....for the bears. Futures are pointing slightly lower, but the next trump tweet could be a big one ;-)
> 
> View attachment 101478



Are you using any alternates for the DJIA?  It seems pretty strange and not very likely that the DJIA would make a new wave 5 ATH and and All Ords a bear market rally? Not that I am an expert in any way but  the wave 4 expanding triangle count probably does not have the "right look" within the advance from 2009 and more than likely wave 5 is complete, considering ofcourse that the larger patterns control the smaller patterns in wave structure. But also this is the problem with EW, quite often practioners have differing wavecounts and see different structures. Such was the case in the March 2009 low when the bulk of  EW practitioners where waiting for a W5 low and lower levels that didn't come to pass.


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## OzWaveGuy (25 March 2020)

gartley said:


> ... It seems pretty strange and not very likely that the DJIA would make a new wave 5 ATH and and All Ords a bear market rally? ...




The DJI and the XAO have moved very differently in the last 10 years.....it's social mood that moves the markets, hence there's every possibility that the indexes continue to move differently. There seems to be a widespread belief that our market follows the US markets, this chart clearly shows it to not be the case

https://www.aussiestockforums.com/attachments/upload_2020-3-15_20-3-9-png.101366/


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## gartley (25 March 2020)

Noted, the two markets have definately moved differently. The wave count and structure of the DJIA however is a little ambiguous. What I like to do ( did the same thing in 2009) is use a simple line chart either weekly,monthly or longer for long trends like we have had for the last 11 years. It acts as a great filter, in this case if applied even to a 3 month chart, shows a clearly completed impulse from 2009. But EW in isolation is not enough sometimes...


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## OzWaveGuy (25 March 2020)

The difference between the DJI reaching a new high (perhaps momentarily) and the XAO retracing the recent decline, but not making a new high, could be very minimal indeed. However,  the DJI has rallied in last decade which means the bulls are still there, but with a lot less influence and their momentum needs time to burn out. An expanding triangle (or Triangle) is a social mood pattern that is effectively providing the time for a burn out.


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## zaxacel1975 (25 March 2020)

OzWaveGuy said:


> Based on this wave count expect the index to retrace 50% or 61.8% higher.




Hi OzWaveGuy, are you saying we move higher by 50% of the recent drop, or 61.8% higher than today’s close, so up to about 8100?


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## InsvestoBoy (26 March 2020)

OzWaveGuy said:


> The DJI and the XAO have moved very differently in the last 10 years.....it's social mood that moves the markets, hence there's every possibility that the indexes continue to move differently. There seems to be a widespread belief that our market follows the US markets, this chart clearly shows it to not be the case
> 
> https://www.aussiestockforums.com/attachments/upload_2020-3-15_20-3-9-png.101366/




it's almost as if the indexes are priced in two completely different currencies and have two completely different sector compositions...


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## IFocus (26 March 2020)

InsvestoBoy said:


> it's almost as if the indexes are priced in two completely different currencies and have two completely different sector compositions...




Very different markets in terms of inflows.

The US businesses, airlines for example have been pouring profits (+ 90% can you believe it?) into share buy backs plus throw in the Trump factor.

Just those two things alone will make the US look very different to the rest of the world.


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## InsvestoBoy (26 March 2020)

IFocus said:


> Very different markets in terms of inflows.
> 
> The US businesses, airlines for example have been pouring profits (+ 90% can you believe it?) into share buy backs plus throw in the Trump factor.
> 
> Just those two things alone will make the US look very different to the rest of the world.




Buybacks only make a difference on the chart if you aren't charting total returns.


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## OzWaveGuy (26 March 2020)

zaxacel1975 said:


> Hi OzWaveGuy, are you saying we move higher by 50% of the recent drop, or 61.8% higher than today’s close, so up to about 8100?



It means a retrace of the recent leg down, so, a 50% retrace would take the index back up to around 5850, or a 61.8% retrace to 6190


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## OzWaveGuy (26 March 2020)

InsvestoBoy said:


> it's almost as if the indexes are priced in two completely different currencies and have two completely different sector compositions...






or, alternatively, the markets are identical, both work on human emotions, which is identified in patterns. The XAO is merely in a different place as it relates to the mood of the people in Australia.


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## OzWaveGuy (27 March 2020)

The XAO  is expected to correct upwards in waves of 3, vs the dji, which is anticipated to move as an impulse move in waves of 5 (to a new high). It therefore makes sense that the XAO will not necessarily follow the dji on this leg upwards.


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## OzWaveGuy (28 March 2020)

The DJI is anticipated to climb towards a new high over the coming months and should advance in a 5 wave impulse pattern (an example is shown). Advancement with a 3 wave pattern could mean an ending diagonal is forming. There is also a remote possibility of a 5th wave failure, and a new high is not achieved.

Approximate channels lines identify the beginning of this next impulse move. The index turned down after precisely hitting resistance at the 38.2% retrace level and should form wave (ii).

'Expert' news sources seem unable to guess what made the market decline by 4% and have published a mix of reasons using the usual adjectives. No trump tweet, I wonder what it could have been...


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## Boggo (29 March 2020)

Too many external influences on the market at the moment for any form of technical analysis to be a reliable guide.
Pic below just for fun... maybe ???

(click to expand)


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## OzWaveGuy (30 March 2020)

Boggo said:


> Too many external influences on the market at the moment for any form of technical analysis to be a reliable guide.
> Pic below just for fun... maybe ???




It's always possible.....in a fast moving market, there will be difficulties pinning down a count.

Here's a possible view on the XAO monthly chart....where there is an expectation the XAO will decline in 5 waves to the previous wave 4 of one lesser degree (eg the '87-'92 4th wave triangle), around 1500


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## zaxacel1975 (3 April 2020)

Would love an update on what your charts are showing now OzWaveGuy!


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## tinhat (3 April 2020)

nICE TIME,


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## tinhat (4 April 2020)

b UT TOO EARLY


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## OzWaveGuy (7 April 2020)

The DJI appears to have completed the first two waves, (i) up and (ii) down, with wave (iii) up underway. Breaking above the 38.2% retracement level is a positive sign AND retracing the wave (ii) down in less time than wave (ii) took to form is also another positive sign.

Third waves tend to be stronger than 1st and 5th waves, so expect the DJI to drive upwards with 'some' aggression upto the 25000 levels (61.8% retrace), or higher as wave (iii) up unfolds.

Side Note: The ending diagonal (i-v) that ended wave E down, looks quite wrong to me (eg no overlap between wave  ii and iv)...will re-assess, but doesn't impact the current counts.


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## Boggo (7 April 2020)

Looking at the daily chart still has some uncertainty for me.
I am holding seven stocks between two accounts and they are all coming back nicely and I have a number of prospects that I want to enter but am reluctant to do so at the moment.

I hope I am wrong and that it keeps on going up but I need at least another positive day of convincing from an EW perspective.
We may actually have seen a large ABC correction ?

(click to expand)


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## Porper (7 April 2020)

It would be an uncharacteristically strong wave-4. It looks more like it's going to be an A-B-C and will hit the 50% - 61.8% retracement zone of the whole leg down. Then another deep retracement?. The strength of this move has surprised me so I am sitting it out for now.


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## Boggo (7 April 2020)

Porper said:


> It would be an uncharacteristically strong wave-4. It looks more like it's going to be an A-B-C and will hit the 50% - 61.8% retracement zone of the whole leg down. Then another deep retracement?. The strength of this move has surprised me so I am sitting it out for now.




It does (just) fit with an A-B-C correction but I am tending to think it is defying gravity at the moment.

Always interesting to try to predict it non the less.

I agree with sitting it out, would rather miss out on a bit than taking a gamble while large erratic moves are becoming the norm.

(A-B-C view, click to expand)


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## Porper (7 April 2020)

Sorry, I rushed and didn't make myself clear. 

I meant a 5-wave leg lower had completed on your chart Boggo. This means an A-B-C correction higher maybe unfolding. I'll post a chart later when I have more time.


Boggo said:


> Looking at the daily chart still has some uncertainty for me.
> I am holding seven stocks between two accounts and they are all coming back nicely and I have a number of prospects that I want to enter but am reluctant to do so at the moment.
> 
> I hope I am wrong and that it keeps on going up but I need at least another positive day of convincing from an EW perspective.
> ...


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## Boggo (7 April 2020)

I'm aware that we are discussing the DJI etc on the XAO thread but they are all behaving similarly.
The charts of the DJIA I posted earlier were a response to a 60 min chart of the same.

The more stable chart and the one I am paying most attention to is the S&P 500.

The position of yesterday's close is interesting on the chart below and is a follow up from here...
NYSE Dow Jones finished today at:

(click to expand)


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## OzWaveGuy (7 April 2020)

Porper said:


> It would be an uncharacteristically strong wave-4....




Not really, in terms of a wave 4, the expanding triangle on the DJI started in Jan 2018 and has taken over 2 years to complete. This was just 1 leg of 5 of a large sideways move that's already 'recovered' to where the DJI was at the end of 2018.


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## Porper (8 April 2020)

The chart I was referring to was Boggo's S&P 500. The smaller degree count. Wave 2 was sharp, wave 4 should be different. Usually it's a shallow pattern, often a triangle. Either way I am expecting another leg down.


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## Porper (8 April 2020)

The XJO chart here allows for the current bounce to continue up to the target area around 6000. Although the powerful leg lower to wave (i) doesn't subdivide, the recent bounce is enough to suggest wave (ii) is in motion. Rejection around 6000 should kick-start the next impulsive move lower.

A push above the 50-61.8% level would add weight to a major low already being made. Not likely but the market is a strange creature. Especially US markets!


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## sptrawler (8 April 2020)

Porper said:


> The XJO chart here allows for the current bounce to continue up to the target area around 6000. Although the powerful leg lower to wave (i) doesn't subdivide, the recent bounce is enough to suggest wave (ii) is in motion. Rejection around 6000 should kick-start the next impulsive move lower.
> 
> A push above the 50-61.8% level would add weight to a major low already being made. Not likely but the market is a strange creature. Especially US markets!




If there is a charge toward the 6000, I would imagine there would be some aggressive selling, I know I will be lightening up.
I feel the chances of a leg down, are more likely, as actual business numbers start coming in.
Thanks for the charts Porper and Boggo, much appreciated and gives a lot of insight into the mystery of charting.


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## Boggo (8 April 2020)

Porper said:


> The XJO chart here allows for the current bounce to continue up to the target area around 6000. Although the powerful leg lower to wave (i) doesn't subdivide, the recent bounce is enough to suggest wave (ii) is in motion. Rejection around 6000 should kick-start the next impulsive move lower.
> 
> A push above the 50-61.8% level would add weight to a major low already being made. Not likely but the market is a strange creature. Especially US markets!






sptrawler said:


> If there is a charge toward the 6000, I would imagine there would be some aggressive selling, I know I will be lightening up.




Tending to agree with both of you.
The potential W.4 turnaround that I have been watching for doesn't seem to be going to happen so I think your W.2 thoughts may be in play Porper.

(click to expand)


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## sptrawler (8 April 2020)

Not that i know anything about charting, but on the charts of some of my shares, there is a definite uptrend in the MACD and Coppock indicators from about 20th March. Which does correspond with the general trend on your posted charts, as one would expect, just learning go easy.


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## Boggo (8 April 2020)

sptrawler said:


> Not that i know anything about charting, but on the charts of some of my shares, there is a definite uptrend in the MACD and Coppock indicators from about 20th March. Which does correspond with the general trend on your posted charts, as one would expect, just learning go easy.




Yes, from what I am hearing from friends etc there is a lot of positive sentiment around generated I think through everyone looking for a bargain.
Not sure if they are ahead of the game or just gambling but for me I am approaching this market (herd ?) behaviour with caution.


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## OzWaveGuy (8 April 2020)

XAO continues to work it's way up as a corrective 2nd wave. Looking at the current structure, eg what looks to be a triangle for wave 'b',  you can see that investors and traders are hesitant. This triangle (if correctly interpreted), makes all the difference, as it implies a 3 wave push up to complete wave 'A'....which is corrective, thus confirming that the bigger wave 2 is a corrective wave.  A few assumptions at the moment in how wave 2 may look.

If the DJI heads to a new high, then there's a good chance the XAO will push higher to the 61.8% retracement levels or to 7000, but not form a new high to complete wave 2 up.


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## zaxacel1975 (8 April 2020)

Hi OWG, how much weight do you put on the expected timing in your chart?
Looks like up tomorrow, down then up to your target over a few days. I realise with Easter public holidays this would actually be next week. Do you anticipate those possible moves could happen over such a short period of time to get back up to the 7000 area?


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## flightcrank (9 April 2020)

zaxacel1975 said:


> Do you anticipate those possible moves could happen over such a short period of time to get back up to the 7000



Well it took a decade or so to recover to new highs from the 08' GFC. I would guess this crisis will be much the same.


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## OzWaveGuy (9 April 2020)

zaxacel1975 said:


> Hi OWG, how much weight do you put on the expected timing in your chart?




It's an estimate, without attention to timing. Corrective waves can unfold in a multitude of ways. This is my 'best guess' atm. If wave 'A' completes, then a sharp drop for wave 'B', there is a strong possibility to leverage wave 'C' up.


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## InsvestoBoy (9 April 2020)

sptrawler said:


> Not that i know anything about charting, but on the charts of some of my shares, there is a definite uptrend in the MACD and Coppock indicators from about 20th March. Which does correspond with the general trend on your posted charts, as one would expect, just learning go easy.




FWIW, Coppock is supposed to be used just on the monthly chart and is considered a buy signal when turning up from a low level (currently turning down from a high level on monthly charts).

FWIW part 2, this is the reasoning behind the parameters chosen for the indicator:


> Coppock used 11 and 14 periods because, according to an Episcopal priest, this was the average mourning period when grieving the loss of a loved one. Coppock theorized that the recovery period for stock market losses would be similar to this timeframe.




Make of that kind of indicator construction what you will


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## sptrawler (9 April 2020)

InsvestoBoy said:


> FWIW, Coppock is supposed to be used just on the monthly chart and is considered a buy signal when turning up from a low level (currently turning down from a high level on monthly charts).
> FWIW part 2, this is the reasoning behind the parameters chosen for the indicator:
> Make of that kind of indicator construction what you will



Thanks for the info investoboy, the coppock indicator on the shares I was talking about, I bought they were, PPS, CWY, VUK and MCR on 23/03 or 24/03 from memory, but as I said I am hopeless at charting.
I'm only working from the knowledge gleaned off a couple of members on here, thanks to @tinhat, @Boggo and @Skate, so thanks for adding to it also.


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## Logique (9 April 2020)

OzWaveGuy said:


> XAO continues to work it's way up as a corrective 2nd wave. Looking at the current structure, eg what looks to be a triangle for wave 'b',  you can see that investors and traders are hesitant. This triangle (if correctly interpreted), makes all the difference, as it implies a 3 wave push up to complete wave 'A'....which is corrective, thus confirming that the bigger wave 2 is a corrective wave.  A few assumptions at the moment in how wave 2 may look.
> 
> If the DJI heads to a new high, then there's a good chance the XAO will push higher to the 61.8% retracement levels or to 7000, but not form a new high to complete wave 2 up.
> 
> View attachment 102105



Fearless as ever OWG!  Volatility is unwinding, so I think the near term direction is up.  Will that rising wedge a) -b) become a price channel, I hope so


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## mcgrath111 (9 April 2020)

I'm finding the potential of further increases scarier than a decrease to the xao. It also raises questions as to who is buying?!
Is it QE? or are insto's buying too?


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## InsvestoBoy (9 April 2020)

mcgrath111 said:


> I'm finding the potential of further increases scarier than a decrease to the xao. It also raises questions as to who is buying?!
> Is it QE? or are insto's buying too?




Short covering, portfolio rebalancing, CTAs, etc.


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## flightcrank (9 April 2020)

mcgrath111 said:


> It also raises questions as to who is buying?!




People who missed out on the GFC. and can see a long term opportunity this time round. Only happens once every decade or so


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## tinhat (9 April 2020)

Keep some powder dry boys and girls. Trade with caution. I'm buying companies but I'm taking profits.  Be prepared to hold anything you buy or be prepared to lose everything. The global recession hasn't even begun to hit yet. The market may bounce back but the economy won't.

I'm not smart enough to trade elliot. I only look at fibs because I aim to hold so look to time changes to my positions. Hopefully the bottom is in this time around but it's going to be bouncy.


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## mcgrath111 (10 April 2020)

flightcrank said:


> People who missed out on the GFC. and can see a long term opportunity this time round. Only happens once every decade or so



GFC had blue chip bargains, I can't see that much value here yet. The Dow is back to roughly beginning 2019 levels; I don't think people were saying it was cheap then. 
I'd love to be wrong, as a substantial chunk of my money is with vanguard in a managed fund; yet I can't help buy think when the markets inevitably decline; plenty of 'buy and hold' retail investors will sell.


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## IFocus (10 April 2020)

Early days every one this has a long way to go shutting down the world economy has not happen before in your lifetime if and when it starts again it will not resemble the pass.


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## IFocus (10 April 2020)

Ops try "past"


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## hja (10 April 2020)

IFocus said:


> Ops try "past"



4 million unemployed, 600,000 have applied to access superannuation... pinch me but not too hard.


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## flightcrank (13 April 2020)

mcgrath111 said:


> GFC had blue chip bargains, I can't see that much value here yet




Check out some of the big 4 banks. Dropped 30% - 40% by the end of march in the span of a week. I see value there if holding for the long term.


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## mcgrath111 (13 April 2020)

flightcrank said:


> Check out some of the big 4 banks. Dropped 30% - 40% by the end of march in the span of a week. I see value there if holding for the long term.



You could be right, I'm little more than a beginner.
I'm curious as to what your 'value' is based on. Is it that it has fallen 30-40% so it must be value? or have you calculated a margin of safety?
I don't trust my DCF's (Even more so in times of uncertainty).
(I feel it reads as though I'm **** stirring, just genuinely curious as to how you determine value.)


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## Boggo (15 April 2020)

The S&P500 seems to be leading the march of the indices but it is an area of decision at the moment imo.
Which way from here is it going to lead ?

(click to expand)


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## flightcrank (16 April 2020)

mcgrath111 said:


> I'm curious as to what your 'value' is based on. Is it that it has fallen 30-40% so it must be value?




Its not rocket science. blue chip banks that were down 30% - 40%, consistently pay dividends. Given a long term out look of 5 to 10 years, what do you see ? them dropping further than current levels in that time?

My value is based on common sense really. Even given the mantra of past performance is not an indicator of future performance.


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## OzWaveGuy (17 April 2020)

The DJI looks to be completing a triangle wave (iv) before a push up to complete wave 1. The index needs to break out above 23,955 to provide evidence of the next small push up to finish wave 1 up, perhaps near the 25,000 levels (61.8% retrace).


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## OzWaveGuy (20 April 2020)

The XAO appears to have completed the A wave up of the larger wave 2, there is a potential for the index to drop lower over the next several days. Watch for a break either below or above the current levels that will provide further clarity on the wave count.


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## IFocus (21 April 2020)

Well that's keeping everything nice and neat OWG now for possible leg B


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## Boggo (21 April 2020)

Gonna be scary if this comes off !!

(click to expand)


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## sptrawler (21 April 2020)

Looks to me Boggo, that the only hope is positive spin re opening the economy, something has to turn sentiment positive. Or else.
The down side is, the Banks report in the next couple of weeks, which wont be good.


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## Boggo (21 April 2020)

sptrawler said:


> Looks to me Boggo, that the only hope is positive spin re opening the economy, something has to turn sentiment positive. Or else.




Considering what the world has been though I'd hate to think what would have to happen to drive it to those potential levels.
Big oil companies failing, no fuel, road transport inhibited. The possibilities are endless !


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## sptrawler (21 April 2020)

Boggo said:


> Considering what the world has been though I'd hate to think what would have to happen to drive it to those potential levels.
> Big oil companies failing, no fuel, road transport inhibited. The possibilities are endless !



Yes, it isn't good.


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## OzWaveGuy (23 April 2020)

OzWaveGuy said:


> The XAO  is expected to correct upwards in waves of 3, vs the dji, which is anticipated to move as an impulse move in waves of 5 (to a new high).




So far, the XAO has moved upwards in a wave of 3, and the DJI has moved upwards in a wave of 5 (see below), providing a little more evidence that the XAO is correcting upwards. The DJI on the other hand is moving impulsively upwards that confirms for the short term at least, the potential for a drive higher (and to an anticipated new high).

As commented by others, this doesn't provide the XAO with a positive outlook for the longer term, however, this view is consistent with the corrective behavior of the XAO since the end of October 2007. A last major leg down is needed to complete an anticipated flat correction (could be a triangle also, less severe and more sideways action). No matter what levers and buttons are pushed by governments and corporations, the negative social mood still needs to play out, and is represented as a corrective wave in the stock market.


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## OzWaveGuy (29 April 2020)

The XAO appears to still be in the middle of the B wave down. The push up from the end of wave 'a' seems slow and not fast enough time-wise to indicate wave B is complete, so beware of a possible decline to the 5000 level or below.


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## zaxacel1975 (11 May 2020)

OzWaveGuy said:


> The XAO appears to still be in the middle of the B wave down.




Would love an update OWG. Always interested in your take on what you are seeing!
Thanks


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## OzWaveGuy (12 May 2020)

zaxacel1975 said:


> Would love an update OWG. Always interested in your take on what you are seeing!
> Thanks




nw, for the XAO, it looks as though the 'B' wave previously discussed could be unfolding as a triangle. Still a chance that it could drop below the current consolidation levels. Watch for a breakout very soon.


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## zaxacel1975 (12 May 2020)

OzWaveGuy said:


> Watch for a breakout very soon.



Down to retest the March low potentially?


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## sptrawler (25 May 2020)

What is the consensus, a V shaped, U shaped or W shaped recovery?


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## Boggo (25 May 2020)

sptrawler said:


> What is the consensus, a V shaped, U shaped or W shaped recovery?




XAO seems to finally be on the right side of what was resistance. Now a support line ?

(click to expand)


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## sptrawler (25 May 2020)

Boggo said:


> XAO seems to finally be on the right side of what was resistance. Now a support line ?
> 
> (click to expand)
> View attachment 103766



Thanks Boggo, always appreciate your input. There is obviously a lot of trepidation in the market.


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## OzWaveGuy (27 May 2020)

The XAO has broken out of a 'X' wave triangle and continues towards the 6000 resistance levels. The X wave joins two a-b-c (three wave) corrections together and is quite often a triangle.

I doubt that wave 2 will complete as shown, but continue to develop as a more complex correction and thus this initial wave up is the first wave of a more complex wave 2 correction.

At 138% of the width of the X wave triangle, the XAO will be at the 6000 levels, hence a change in trend is possible to start a leg down. Caution will soon be needed as a strong leg down to form a 'B' wave could develop before returning to the 6000 levels (or higher) as a wave C (and perhaps to fill the gap from the initial leg down between 6000-6280).

This slow development of this leg up indicates corrective behavior, so still not a positive outlook for the XAO. Corrective wave patterns are usually hard to follow, esp if they are complex in nature, which this seems to be.


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## OzWaveGuy (29 May 2020)

The DJI is moving up in waves of 5 as previously discussed, and with Wave 2 assumed complete, there should be a strong wave 3 advance. If the advance doesn't materialize at this point in time, then there may be a remote possibility of an 'expanded flat' correction forming, where Wave 2 is not yet completed.

This is only a remote possibility at the moment, and is called out since the advance from the completed wave 2 (shown) is at 138% of the depth of the wave 2 decline. An expanded flat B wave usually won't go beyond 138% of the A wave down (in this case shown as wave 2).


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## OzWaveGuy (11 July 2020)

The DJI looks to have completed a fourth wave triangle in the continuing 5 wave advance. Here it becomes interesting as to where the index will terminate. This wave count positions the final wave 5 to be no more than 30,274 (since wave 3 cannot be the shortest). 

The previous DJI top is at approx 29,550, hence caution will be needed if the DJI enters the envelope between 29,550 and 30,273 as a major decline could materialise (Biden becomes president? haha). Alternatively, there is still the potential that a larger wave structure is unfolding and the decline will only be temporary as a larger wave 2 decline before a strong advance upwards takes place (trump retains the presidency? haha).

The notion of who is president has no or very little influence on the market. 

Caution will soon be needed. Are you ready?


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## Garpal Gumnut (12 July 2020)

OzWaveGuy said:


> The DJI looks to have completed a fourth wave triangle in the continuing 5 wave advance. Here it becomes interesting as to where the index will terminate. This wave count positions the final wave 5 to be no more than 30,274 (since wave 3 cannot be the shortest).
> 
> The previous DJI top is at approx 29,550, hence caution will be needed if the DJI enters the envelope between 29,550 and 30,273 as a major decline could materialise (Biden becomes president? haha). Alternatively, there is still the potential that a larger wave structure is unfolding and the decline will only be temporary as a larger wave 2 decline before a strong advance upwards takes place (trump retains the presidency? haha).
> 
> ...



Thanks @OzWaveGuy .That chart is a saver.

gg


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## OzWaveGuy (9 August 2020)

The DJI continues upwards with waves (i) and (ii) complete of wave 5.

An observation on the construction of this larger wave that started in March 2020 to be aware of: 

Wave 1 is the subdividing wave (usually there's one subdividing wave in a 5 wave structure and it is often wave 3)
It is not expected that wave 5 will subdivide as well as wave 1.
Wave 5 may instead be forming an ending diagonal, and a hint of this is the small wave (i) could also be interpreted as a small 3 wave advance.
The target areas between 29,550 and 30,273 as previously discussed are still in play for the termination of the large advance since March. Whether a subdivided 5 wave or an ending diagonal develops should not make a difference, but something to be aware of.


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## OzWaveGuy (9 August 2020)

The XAO appears to be confirming a position previously held: The DJI should see new highs, but the XAO will not and is correcting upwards.

The XAO so far has confirmed this position by exhibiting qualities that indicate a lack of strength to drive to new highs (time & wave structure) and helps confirm that the push upwards is merely a corrective wave.

I believe there's further upside for the XAO based on the difficult to interpret count of the second a-b-c push upwards. Perhaps a target area around 78.6% retracement (around the 6700 area) is a reasonable assumption for now. 

Dropping below the first 'b?' would mean something else is unfolding and could indicate the larger decline is back underway.


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## OzWaveGuy (15 August 2020)

The last push up by the DJI is estimated as a 5 wave impulse pattern, and based on Fibonacci relationships:

Wave (iii) ends at 28500, which is 161% of wave (i)
Wave (iv) is a triangle (assumed)

Wave (v) ends at 30036 (or slightly higher), which is 138% of wave (i), but cannot be more than 100% of wave (iii).
Hitting the underside of the lower channel trend line may provide the necessary resistance to create a reversal. Let's see what the next few weeks brings.....


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## OzWaveGuy (19 August 2020)

XAO is continuing upwards and is now supported by the 61.8% retracement level, but....

The index appears to be moving up in a small 5 wave impulse move that almost looks complete, which is expected for the remaining wave 'c' of the 2nd a-b-c corrective wave upwards. If true, what is the expectation once this 5 wave move completes? 

It is possible that a larger corrective wave is forming and there's more upside, however, the size of the current i-ii-ii-iv-v wave structure fits with other similar legs within the bigger wave 2 correction (see previous XAO post)  and should indicate caution once this small impulse completes.

Dropping below the 61.8% support levels with force should be a warning, and further dropping below the 'b?' level indicates confirmation something bigger is occurring.


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## OzWaveGuy (30 August 2020)

The DJI continues to climb past the 28500 levels, and the wave structure does support the count below with wave (iv) complete (also MACD is at an extreme for wave (iii)). Under this count, the last push up is now underway to complete wave (v) and the bigger wave 5. Breaking below the trend line would indicate caution for this smaller wave structure.

Looking at the Fibonacci relationships: Wave (v) could reach at least 29850 which is 100% of wave (iii) or move beyond this level.

It should be noted that in the last DJI post an error is made in red:
"Wave (v) ends at 30036 (or slightly higher), which is 138% of wave (i), but cannot be more than 100% of wave (iii)."​
This is incorrect, wave (v) can be more than 100% of wave (iii). Third waves cannot be the shortest waves, in this case wave (i) is the shortest.

The MACD continues to show weakness (usually expected after the fourth waves), so caution is necessary at least on this smaller wave scale.
​


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## kitdoctor (3 September 2020)

Long-time lurker but hopefully I'll have something worthwhile to say.  I have not read this entire topic so if I go over old ground I apologise.

If you follow XAO/XJO closely you'd have to be disappointed with its only marginal new all-time high in February 2020.  From this the most probable conclusion is that XAO/XJO did not resume a healthy trend up (aka bull market) from the March 2009 low.  So, from an EWP perspective, the entire wave up from the March 2009 low must be part of a corrective structure or a motive structure that has corrective characteristics (i.e. a leading contracting diagonal).  

I rule out the latter on the basis that there is not enough time for a second wave, third wave, fourth and fifth wave to play out of, I would say Primary degree, before the next GFC is due.  Hang on you say, you know when the next GFC is due.  I can elaborate on that if required but it's due 2026.

Secondly, when I look at the charts of the big four banks I see corrective structures that started at their 2007 highs and that have continued post their March 2009 lows. This supports XAO/XJO also being in a corrective structure.

Looking at the options for a corrective structure in XAO/XJO a zigzag has been ruled out because the all-time high in February exceeded the origin of the A wave (the GFC I decline).  This leaves two simple options, a flat or a triangle and a third being a complex correction.  I think a contracting triangle fits nicely, a structure that just drags on consuming time moving net sideways would be a perfect fit to end a fourth wave of I would say Supercycle degree.  It also fits in with forecasts for no new all-time high to occur over the next 5+ years.  If correct, we'll almost have two lost decades.

A more complex structure can't be ruled out but there are many ways this could play out.




As for the rally since the March 2020 low this could the first A wave of a B wave triangle one wave degree larger that fits with a zigzag that started at the February 2020 high. Only time will tell how complex this structure is.




I must express my thanks to @OzWaveGuy. Very few people comprehend that the EWP is the most difficult of all the approaches to TA. I'm sure you value his contributions here.


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## OzWaveGuy (8 September 2020)

The recent declines on the XAO look like a small a-b-c (3-3-5) correction with further upside potential to take the index to around the 6700 levels (78.6% retracement) to complete wave 2 up.

From here, dropping below 6000 would be significant and places the current count in danger and the wave structure to the current high (shown as 'v') would need to be re-evaluated. This whole last segment below can be evaluated in several ways, hence based on the evidence, there's a lower boundary at 6000 and an upper boundary at 6700 to establish some limits.


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## OzWaveGuy (8 September 2020)

kitdoctor said:


> A more complex structure can't be ruled out but there are many ways this could play out.
> 
> View attachment 108596




Thanks kitdoctor for your post.

The above triangle is a possibility to consider.


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## OzWaveGuy (11 September 2020)

The recent declines have provided some additional clarity on the XAO, namely the hard to follow sideways action on the hourly chart looks to be a large corrective (a)-(b)-(c) wave as a flat correction (3-3-5). The (c) wave being an ending diagonal with overlapping waves.

The (c) wave looks complete and the XAO should drive higher from here. There is allowance under this count for the (c) wave to drop lower and below 6000 and down to the levels near the end of the (a) wave at 5830 as flat corrections will sometimes do.  

This means the 2nd a-b-c wave discussed here should now push up to complete the final wave c up, to possibly the 78.6% retracement levels at 6700.


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## OzWaveGuy (25 September 2020)

The XAO has continued downwards to complete an ending diagonal pattern for wave (c). For this wave count to be valid, wave (c) is required to be a five wave structure - an impulse wave or a 5 wave ending diagonal to complete the larger flat correction wave 'b', which in this case is the latter.

A breakout of the ending diagonal has occurred, and the index needs to push upwards from here. A drop below the end of wave (c) means a bigger pattern is possibly unfolding and caution is required. 

The MACD has been gaining strength while the index declined, providing some additional confirmation


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## OzWaveGuy (1 October 2020)

The DJI could be at a critical point with a potential to be beneficial for the bulls. If you recall in this post, the DJI was estimated to complete a five wave advance with a new high and reaching 29850 or higher. The index completed it's 5 wave advance, but only made close to 29200 before declining. So what's important about this?

There is an expectation once the DJI completes its 5 wave advance, there is a high possibility that the index would decline aggressively, even without a new high (5th wave failure). This decline would start with a small  5 wave drop, and grow into larger 5 wave declines. This has not happened.

Instead, a 3 wave a-b-c decline has occurred which poses the question: Is this a-b-c correction merely wave 2 of a bigger advance upwards? If so, then it appears a small 5 wave push upwards has occurred to support further rises on the DJI. It should be noted that the size of this correction looks small compared with the overall wave size of this advance from the March low, so caution is needed. Also, wave 2 declines can sometimes be deep (eg 61.8%), so this a-b-c correction for wave 2 does look out of place by not even reaching the minimum 38.2% retracement. 

More time is needed for confirmation one way or the other. Breaking above the wave 5 top with force and in shorter time than the a-b-c correction took to complete should be confirmation of another advance upwards. If the DJI does indeed drive upwards, then a minimum target level could be at the 32500 levels.


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## OzWaveGuy (8 October 2020)

The push upwards out of the ending diagonal from this post is underway and completes wave 'b'. The expectation is a  5 wave advance upwards and onto a new short term high. A target area of around 6700 is  feasible.


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## OzWaveGuy (13 October 2020)

Small minute wave (iii) looks almost complete so expect some sideways movements to build out wave (iv). 6700 is still a target for this small impulse wave up.


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## OzWaveGuy (22 October 2020)

With wave (iii) complete and it appears that a wave (iv) expanding triangle also looks complete. A push up to complete wave (v) is now needed with a target area of around 6550.


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