Australian (ASX) Stock Market Forum

Elliott Wave and the XAO

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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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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.
Click to expand...

Interesting Count?
May need to do a little work on your application.
 
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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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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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. :)
 
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. :)
Click to expand...

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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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
 
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?

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

Thanks
Click to expand...

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

Regards
t
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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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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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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 :2twocents

(click to expand)
 

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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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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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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... :)
 
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... :)
Click to expand...

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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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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