How low can the All Ords go?

GreatPig said:

I've posted this before, but a chart taken from Bob Prechter's book Conquer The Crash. A bit sketchy I'm afraid, due to the manner of its reproduction. The book was first published in 2002, and this is from a 2007 reprint, but I don't think the chart has been added to since the original release.

GP

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Prechter is known for changing his counts in different versions of his books so as to not look a fool.

Editions 1 and 2 of one of his books has very different counts compared to later prints of the book. The initial counts were proven to be very, very wrong.

Good chart OWG,


I do see some problems though.

-Wave III is only longer than wave V in terms of time and not price. As such it does not fit the tenets of Elliotts work that wave 3’s are usually longest.

-Current move down from the 07 peak does not count best as an impulse. Especially if the current decline has already ended and I think it did so on the 10th October. I have called it a wave A (a e zig zag)


Not sure if the bear market has finished though. Given the similarities between this decline to the initial declines of the DJI in 1929 and the Nasdaq, I would say no. But a multi month wave B rally is expected soon


In my next post I will post some fibonacci spiral charts that in my opinion better explain the longer term Elliott Analysis

All the best

STONER

tech/a said:

Nice analysis Waves.
Your count still sits well with the one G/P has posted.
If G/P's is correct perhaps the 1000 scenario is unlikely.
Could still happen as it wouldnt be encroaching into wave 1

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Is OWG definately Wavepicker?

I would think so for sure just by reading the analysis, but not sure it has been confirmed yet..........

charttv said:

Prechter is known for changing his counts in different versions of his books

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Just read this copy of The Elliott Wave Theorist (PDF) from July 2000. At that time (assuming this document hasn't been changed since then) he was predicting a major crash and depression, with a low in 2003. He got the timing right, but the major crash and depression was avoided, supposedly (I've read elsewhere) due to the Fed flooding the market with liquidity - triggering the bull run up from that time.

He was also predicting the depression to be more along the lines of the one following the 1720 collapse of the South Seas Bubble, where he reckons average stock prices, including allowance for those that went to zero, fell by 98%. If the XAO continues to fall that much, we're looking at a bottom around 140.

Now that's a bear market!

GP

Some interesting facts on these charts. They might be able to be used togther with the chart OWG posted.


The following are Fibonacci Spiral Charts of the DJIA.

They are self explanetory. The bullmarket of the last 30 odd years started after the low of 1974. To 2008 that is 34 Fibonacci Years. There have been various other LINKS such the low of the crash of 87, the low of 95, the peak of 2000, the low of 2003 ending in 21, 13, 8, and 5 fibonacci years respectively. These links all came together in 2008.

I knew this from years ago that 2008 was going to special, but not sure in what way, i.e low or high, that was impossible to tell until the low of 2003 was confirmed.

So what Of the future? Well 2011 is the next crucial year followed by 2012/13. Time will tell what that brings!



Fast forwarding to the current decline, as mentioned in my previous post, it was 377 Calendar days from the 2007 peak to the 10 October low. I believe this low has a good chance of holding, but time will tell.
Also of importance, it will be 55 fibonacci WEEKS from the high of last year in the first week of November which but a week or two away. There are two other links that come together at approximately the same point from two other points.

As for Charttv and his comments re Prechter. When Prechter wrote his books, his wavecounts were based on the market data that was available at the time. As more data and time passes there sometimes is a need to alter counts as it is a dynamic process. Any other technicain using any other methodology would go through a similar process.

All the best

STONER

As more data and time passes there sometimes is a need to alter counts as it is a dynamic process. Any other technicain using any other methodology would go through a similar process.

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Come on Stoner you know as well as I do that the masses EXPECT rigid analysis fixed in concrete.
Its about being right you know!
Dynamic?? That simply just wont do!

Mind you Women readers wont have a problem with this----they're perminently dynamic in all they do!

Some good discussion here. The comment about WavePicker - sorry wrong guy.

Prechter's work has certainly been valuable and reasonably accurate although the calls for a major depression have been a little out in terms of timing - I won't hold that against him, He's called major tops reasonably well. One of the problems I do find with Prechters work are in some cases waves tend not to be counted when there is an obvious count that needs to be included or complex corrections aren't called correctly.

Neely's work caters for these missing counts or corrections appropriately with deep discussion on corrections and possible scenarios that Pretchter and his EWI organization don't cover well in some scenarios.

tech/a said:

Come on Stoner you know as well as I do that the masses EXPECT rigid analysis fixed in concrete.
Its about being right you know!
Dynamic?? That simply just wont do!

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Very true t/a. This is especially the case when there is negative social mood, people will seek a 'holy grail' to light the way, but will quickly discard it should there be an inaccuracy of some kind.

lol, this reminds of me "Reminiscenses of a stock operator". Mr Livermore and his endless dribbling about how "people want tips". The masses are lazy, simple as that IMHO and struggle to understand this is simply a game of probability and application.

Hi , any good stock tips?

nunthewiser said:

Hi , any good stock tips?

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lol, you probably should have been buying up all the FMG you could find and particularly averaging down along the way! Didn't you know how cheap it was and how it was going to hit $50? :

MRC & Co said:

lol, you probably should have been buying up all the FMG you could find and particularly averaging down along the way! Didn't you know how cheap it was and how it was going to hit $50? :

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wow man thanks i might take have to take a mortgage out on dr ollivers place too and join the suffisticates

How are we all feeling about tomorrow?

Timezone shelter from the storm has shown some 'holding out' rallies on the long road down in the last few Mondays, of course wiped out quickly by Tuesday drags, and seemingly dependent on a good Saturday (in the day-behind markets).

Not asking for solid facts, just peoples feelings. Do you feel we are all bottomed out or is there still massive amounts of de-leveraging to go? Do we have a few more holdout 1-day-Monday rallies with all this liquidity or are the big liquidators just going to keep pummeling things? Is the USDX undefeatable?

I am all out of the game, only one quiet holding remaining in the "portfolio", figuring I only need to hedge against the economic apocalypse. I mean if this is the bottom then I get to keep my job and can get back in the market whenever the smoke clears.

EDIT: Oh and I forgot to mention my naughty word of the day: hyper-stagflation.

nunthewiser said:

wow man thanks i might take have to take a mortgage out on dr ollivers place too and join the suffisticates

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ha ha, no problems mate. If you need anymore tips, just ask, I have a bag full of them.

Heard a tip on BNB the other day too, how it's going back to well above and beyond $30. I think a lot of Property stocks are going to be the next hot sector too! Don't tell many others though.

I thought I'd update the medium term view posted early this month https://www.aussiestockforums.com/forums/showpost.php?p=351103&postcount=134

on where the market appears to be heading.

So far, there's been no reason to change the outlook based on the current market action. The short term wave counts on the 15min chart also indicate that the end of wave iii is approaching. Note that alternate counts exist including the end of wave 3 may be approaching too. Many people in this forum have been indicating a bounce is overdue with momentum indicators showing heavily oversold conditions or bullish divergences.

Either way, a small bounce into wave iv should occur soon, and perhaps it will coincide very close to the 138% of wave 1 Fibonacci ratio (which the internal structure of wave iii appears to support at this stage).

I would expect wave iv to be a zig-zag correction or most likely a triangle to take us into the US election next week before breaking lower to complete wave 3.

In addition, an alternate a-b-c count exists shown in blue. Of course we won't know if this alt count is valid until wave 4 completes (or not). This will be the core indicator as to whether the market continues lower for several years.

In elliottwave, a correction with an initial 5 waves down must be followed by a 3 wave correction then another 5 waves down forming a 5-3-5 zig-zag correction. So either we have a large A-B-C correction (will be confirmed at the end of Wave 5), or a smaller a-b-c correction as shown in blue. Time will tell.

However, I believe the financial crisis has only just begun, in fact, it began years ago in the 1970's when the markets aggressively departed upwards from the 100 year trendline due to the credit boom which has continued for 30+ years. The last 8 years has revealed unscrupulous lending to almost anyone and everyone, an indicator that new warm bodies to consume credit were fast running out.

Social mood has turned negative which will mean the knives are coming out on those that "allowed" this lending to go unchecked - as already seen with Alan Greenspan recently. However, this will be only the start of more negative mood to come as almost everyone will be affected in some way by this downturn.

korrupt_1 said:

1000-1500!!! bloody jesus f**king christ!!u got to be kidding me!!!.... @%!^&%@^&!!@!!!!!!!!!!

- excuse my above language - but thats the only polite way i could have worded it!!

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k1,
its not compulsory that you hold till then and sell at that point - many other choices 'en route'

MRC & Co said:

ha ha, no problems mate. If you need anymore tips, just ask, I have a bag full of them.

Heard a tip on BNB the other day too, how it's going back to well above and beyond $30. I think a lot of Property stocks are going to be the next hot sector too! Don't tell many others though.

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Not as silly as some would have this sound.
Diving interest rates
Diving production costs.
Labor costs at least holding.
A flight away from shares.
Should be able to spot this in the property index XXJ.

Tree
Confluence of Fib levels is not uncommon with many forms of charting.
Not the least Elliott Exponents.Anyone who trades off a count without confirmation is really taking risk.
Mind you some do as there is often the possibility of a low risk trade if some supporting (Not necessarily confirming) analysis is seen.

stoner said:

Some interesting facts on these charts. They might be able to be used togther with the chart OWG posted.


The following are Fibonacci Spiral Charts of the DJIA.

They are self explanetory. The bullmarket of the last 30 odd years started after the low of 1974. To 2008 that is 34 Fibonacci Years. There have been various other LINKS such the low of the crash of 87, the low of 95, the peak of 2000, the low of 2003 ending in 21, 13, 8, and 5 fibonacci years respectively. These links all came together in 2008.

I knew this from years ago that 2008 was going to special, but not sure in what way, i.e low or high, that was impossible to tell until the low of 2003 was confirmed.

So what Of the future? Well 2011 is the next crucial year followed by 2012/13. Time will tell what that brings!



Fast forwarding to the current decline, as mentioned in my previous post, it was 377 Calendar days from the 2007 peak to the 10 October low. I believe this low has a good chance of holding, but time will tell.
Also of importance, it will be 55 fibonacci WEEKS from the high of last year in the first week of November which but a week or two away. There are two other links that come together at approximately the same point from two other points.

As for Charttv and his comments re Prechter. When Prechter wrote his books, his wavecounts were based on the market data that was available at the time. As more data and time passes there sometimes is a need to alter counts as it is a dynamic process. Any other technicain using any other methodology would go through a similar process.

All the best

STONER

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Only problem with using Fibonacci years this way is that according to the chart the Fib years are measured back from 2008, eg 34 years to 2008, 21 years to 1987, etc. That means in the Fib sequence that there should be something 3 years ago, then 2 years ago, then 1 year ago, rather than 3 years from now or four five years.

tech/a said:

Mind you some do as there is often the possibility of a low risk trade if some supporting (Not necessarily confirming) analysis is seen.

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on that note has bought BHP and MQG today for a low %loss on stopout point trades ........ happy to take a small loss if wrong , personally expecting a bounce from here no waves about it

prawn_86 said:

How low can the All Ords go?

Zero. At least we know an index cant go negative

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purely off topic and a waste of bandwidth, but a negative index would technically mean everything is reversed, longs are shorts, shorts are longs,... dividends paid, will mean dividends owed,.... banks will PAY you to borrow money to trade... what a weird universe that would be...