Elliott Wave and the XAO

[gartley]

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

 

[rimtas]

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.

 

[rimtas]

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.

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.

 

[PennD]

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.

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

 

[rimtas]

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.

 

[gartley]

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.

 

[rimtas]

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

 

[Porper]

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.

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.

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.

 

[rimtas]

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.

 

[CanOz]

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

 

[gartley]

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.

 

[Triathlete]

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.

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.

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.

 

[qldfrog]

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.

 

[PennD]

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

 

[Porper]

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.

 

[Logique]

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.

 

[Craton]

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!

 

[rimtas]

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.

 

[Smurf1976]

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

+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.

 

[Bill M]

+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.