Elliott Wave and the XAO

[OzWaveGuy]

... 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/

 

[gartley]

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...

 

[OzWaveGuy]

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.

 

[zaxacel1975]

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?

 

[InsvestoBoy]

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...

 

[IFocus]

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.

 

[InsvestoBoy]

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.

 

[OzWaveGuy]

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

 

[OzWaveGuy]

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.

 

[OzWaveGuy]

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.

 

[OzWaveGuy]

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...

 

[Boggo]

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)

 

[OzWaveGuy]

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

 

[zaxacel1975]

Would love an update on what your charts are showing now OzWaveGuy!

 

[tinhat]

nICE TIME,

 

[tinhat]

b UT TOO EARLY

 

[OzWaveGuy]

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.

 

[Boggo]

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)

 

[Porper]

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.

 

[Boggo]

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)