Elliott Wave and the XAO

[rimtas]

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.

 

[rimtas]

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.

 

[rimtas]

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.

 

[tech/a]

Great analysis.
A very good Xmas scenario!

Thanks for the time you put into this.
Opportunity is now!

 

[PinguPingu]

Great stuff, Rimtas. :wreath

 

[PennD]

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

 

[rimtas]

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.

 

[rimtas]

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.

 

[rimtas]

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!

 

[rimtas]

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.

 

[rimtas]

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).

 

[dutchie]

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.

 

[rimtas]

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.

 

[rimtas]

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.

 

[Paavfc]

Oil struggling #oversupply

 

[rimtas]

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.

 

[Logique]

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.

 

[Smurf1976]

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.

 

[rimtas]

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.

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.

 

[rimtas]

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.