Elliott Wave and the XAO

[Porper]

Sorry, I rushed and didn't make myself clear.

I meant a 5-wave leg lower had completed on your chart Boggo. This means an A-B-C correction higher maybe unfolding. I'll post a chart later when I have more time.

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 ?

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View attachment 102048

 

[Boggo]

I'm aware that we are discussing the DJI etc on the XAO thread but they are all behaving similarly.
The charts of the DJIA I posted earlier were a response to a 60 min chart of the same.

The more stable chart and the one I am paying most attention to is the S&P 500.

The position of yesterday's close is interesting on the chart below and is a follow up from here...
NYSE Dow Jones finished today at:

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[OzWaveGuy]

It would be an uncharacteristically strong wave-4....

Not really, in terms of a wave 4, the expanding triangle on the DJI started in Jan 2018 and has taken over 2 years to complete. This was just 1 leg of 5 of a large sideways move that's already 'recovered' to where the DJI was at the end of 2018.

 

[Porper]

The chart I was referring to was Boggo's S&P 500. The smaller degree count. Wave 2 was sharp, wave 4 should be different. Usually it's a shallow pattern, often a triangle. Either way I am expecting another leg down.

 

[Porper]

The XJO chart here allows for the current bounce to continue up to the target area around 6000. Although the powerful leg lower to wave (i) doesn't subdivide, the recent bounce is enough to suggest wave (ii) is in motion. Rejection around 6000 should kick-start the next impulsive move lower.

A push above the 50-61.8% level would add weight to a major low already being made. Not likely but the market is a strange creature. Especially US markets!

 

[sptrawler]

The XJO chart here allows for the current bounce to continue up to the target area around 6000. Although the powerful leg lower to wave (i) doesn't subdivide, the recent bounce is enough to suggest wave (ii) is in motion. Rejection around 6000 should kick-start the next impulsive move lower.

A push above the 50-61.8% level would add weight to a major low already being made. Not likely but the market is a strange creature. Especially US markets!

If there is a charge toward the 6000, I would imagine there would be some aggressive selling, I know I will be lightening up.
I feel the chances of a leg down, are more likely, as actual business numbers start coming in.
Thanks for the charts Porper and Boggo, much appreciated and gives a lot of insight into the mystery of charting.

 

[Boggo]

The XJO chart here allows for the current bounce to continue up to the target area around 6000. Although the powerful leg lower to wave (i) doesn't subdivide, the recent bounce is enough to suggest wave (ii) is in motion. Rejection around 6000 should kick-start the next impulsive move lower.

A push above the 50-61.8% level would add weight to a major low already being made. Not likely but the market is a strange creature. Especially US markets!

If there is a charge toward the 6000, I would imagine there would be some aggressive selling, I know I will be lightening up.

Tending to agree with both of you.
The potential W.4 turnaround that I have been watching for doesn't seem to be going to happen so I think your W.2 thoughts may be in play Porper.

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[sptrawler]

Not that i know anything about charting, but on the charts of some of my shares, there is a definite uptrend in the MACD and Coppock indicators from about 20th March. Which does correspond with the general trend on your posted charts, as one would expect, just learning go easy.

 

[Boggo]

Not that i know anything about charting, but on the charts of some of my shares, there is a definite uptrend in the MACD and Coppock indicators from about 20th March. Which does correspond with the general trend on your posted charts, as one would expect, just learning go easy.

Yes, from what I am hearing from friends etc there is a lot of positive sentiment around generated I think through everyone looking for a bargain.
Not sure if they are ahead of the game or just gambling but for me I am approaching this market (herd ?) behaviour with caution.

 

[OzWaveGuy]

XAO continues to work it's way up as a corrective 2nd wave. Looking at the current structure, eg what looks to be a triangle for wave 'b', you can see that investors and traders are hesitant. This triangle (if correctly interpreted), makes all the difference, as it implies a 3 wave push up to complete wave 'A'....which is corrective, thus confirming that the bigger wave 2 is a corrective wave. A few assumptions at the moment in how wave 2 may look.

If the DJI heads to a new high, then there's a good chance the XAO will push higher to the 61.8% retracement levels or to 7000, but not form a new high to complete wave 2 up.

 

[zaxacel1975]

Hi OWG, how much weight do you put on the expected timing in your chart?
Looks like up tomorrow, down then up to your target over a few days. I realise with Easter public holidays this would actually be next week. Do you anticipate those possible moves could happen over such a short period of time to get back up to the 7000 area?

 

[flightcrank]

Do you anticipate those possible moves could happen over such a short period of time to get back up to the 7000

Well it took a decade or so to recover to new highs from the 08' GFC. I would guess this crisis will be much the same.

 

[OzWaveGuy]

Hi OWG, how much weight do you put on the expected timing in your chart?

It's an estimate, without attention to timing. Corrective waves can unfold in a multitude of ways. This is my 'best guess' atm. If wave 'A' completes, then a sharp drop for wave 'B', there is a strong possibility to leverage wave 'C' up.

 

[InsvestoBoy]

Not that i know anything about charting, but on the charts of some of my shares, there is a definite uptrend in the MACD and Coppock indicators from about 20th March. Which does correspond with the general trend on your posted charts, as one would expect, just learning go easy.

FWIW, Coppock is supposed to be used just on the monthly chart and is considered a buy signal when turning up from a low level (currently turning down from a high level on monthly charts).

FWIW part 2, this is the reasoning behind the parameters chosen for the indicator:

Coppock used 11 and 14 periods because, according to an Episcopal priest, this was the average mourning period when grieving the loss of a loved one. Coppock theorized that the recovery period for stock market losses would be similar to this timeframe.

Make of that kind of indicator construction what you will

 

[sptrawler]

FWIW, Coppock is supposed to be used just on the monthly chart and is considered a buy signal when turning up from a low level (currently turning down from a high level on monthly charts).
FWIW part 2, this is the reasoning behind the parameters chosen for the indicator:
Make of that kind of indicator construction what you will

Thanks for the info investoboy, the coppock indicator on the shares I was talking about, I bought they were, PPS, CWY, VUK and MCR on 23/03 or 24/03 from memory, but as I said I am hopeless at charting.
I'm only working from the knowledge gleaned off a couple of members on here, thanks to @tinhat, @Boggo and @Skate, so thanks for adding to it also.

 

[Logique]

XAO continues to work it's way up as a corrective 2nd wave. Looking at the current structure, eg what looks to be a triangle for wave 'b', you can see that investors and traders are hesitant. This triangle (if correctly interpreted), makes all the difference, as it implies a 3 wave push up to complete wave 'A'....which is corrective, thus confirming that the bigger wave 2 is a corrective wave. A few assumptions at the moment in how wave 2 may look.

If the DJI heads to a new high, then there's a good chance the XAO will push higher to the 61.8% retracement levels or to 7000, but not form a new high to complete wave 2 up.

View attachment 102105

Fearless as ever OWG! Volatility is unwinding, so I think the near term direction is up. Will that rising wedge a) -b) become a price channel, I hope so

 

[mcgrath111]

I'm finding the potential of further increases scarier than a decrease to the xao. It also raises questions as to who is buying?!
Is it QE? or are insto's buying too?

 

[InsvestoBoy]

I'm finding the potential of further increases scarier than a decrease to the xao. It also raises questions as to who is buying?!
Is it QE? or are insto's buying too?

Short covering, portfolio rebalancing, CTAs, etc.

 

[flightcrank]

It also raises questions as to who is buying?!

People who missed out on the GFC. and can see a long term opportunity this time round. Only happens once every decade or so

 

[tinhat]

Keep some powder dry boys and girls. Trade with caution. I'm buying companies but I'm taking profits. Be prepared to hold anything you buy or be prepared to lose everything. The global recession hasn't even begun to hit yet. The market may bounce back but the economy won't.

I'm not smart enough to trade elliot. I only look at fibs because I aim to hold so look to time changes to my positions. Hopefully the bottom is in this time around but it's going to be bouncy.