Elliott Wave and the XAO

[Jay70]

Jay, I agree with you that the correction could well be complete and my thinking is similar to yours re that lower support line. FWIW, we are close to the Spring equinox.

I’m still in learning mode but if we break below it, I’ll be tempted to try an AGET “Type 2” trade (selling at the end of a Fifth Wave rally). Of course, that will be a signal for everyone else to buy.

That 2.618 target now doesn’t look so bad and those smart enough to have bought around 3850 (wish I was one of them) could have made a profit of about $850 per IQ CFD. (Of course those who bought around 3200 are even smarter!)

As OWG pointed out, EWI have a target of about 4900 and they think we might have just completed a third wave within their wave C with more upside to come. I’m not so sure about that but, as always, time will tell.

Attached is a snap shot of 60 min data on the Dec spi (incl Sycom on Friday night) showing the possible start of a W3 which will likely take us through the support at the 4600 area on Monday sometime. This will be the first confirmation the high is in.

Putting all analysis aside one reason I don't think we'll see 4900 or higher and 10,000 on the Dow is simply because everyone is sitting on their hands thinking it's a given. If I were a institutional trader I'd be off loading and reversing below these levels. And from what I'm seeing this is exactly what they have been doing.

 

[Nick Radge]

If I were a institutional trader I'd be off loading and reversing below these levels. And from what I'm seeing this is exactly what they have been doing.

Fridays closing auction doesn't support that immediate view. $2 billion worth of stock changed hands in the closing auction which is huge. This is also coupled with quite a strong close. Both point to buyer demand.

 

[Sean K]

Fridays closing auction doesn't support that immediate view. $2 billion worth of stock changed hands in the closing auction which is huge. This is also coupled with quite a strong close. Both point to buyer demand.

Nick, I can't trace the quote. Where is it from?

 

[Jay70]

Fridays closing auction doesn't support that immediate view. $2 billion worth of stock changed hands in the closing auction which is huge. This is also coupled with quite a strong close. Both point to buyer demand.

Nick, the big question for mine is who were the buyers and who were the sellers. The spi 200 only closed 12 points above it's low. It dropped 30 points in the last 30 minutes.

 

[Nick Radge]

kennas,
the post above mine.

The last 30 mins of SPI trading is a pointless guide as its a very illiquid perod of time after the arbs have left the room. Most liquidity going through is punters rather than the serious boys.

Alas, we shall see in due course!

 

[tech/a]

In case Kenna's didnt see it.

 

[Wysiwyg]

Greetings Mr. Radge,

In your report I notice a chart projecting a March 2009 low revisited around 2011-2012. On what fundamental basis would this happen or is this projection based solely on a longer term period of consolidation (triangle)?

Okay, I get the gist of these projections. One of multiple scenarios that `could` unfold in a time frame beyond anyones knowing. Fantastic stuff.

 

[skyQuake]

Nick, I see a lot of volume and size gets done post cash close, its more volatile than illiquid imo; why do u say its mostly punters? I always thought day SPI is too thin to do real vol and funds would come out then.
cheers.

 

[Sean K]

kennas,
the post above mine.

In case Kenna's didnt see it.

Oh dear.

Thanks for pointing that out.

:couch

 

[wayneL]

In case Kenna's didnt see it.

Are you secretly really a grocer?

 

[Jay70]

kennas,
the post above mine.

The last 30 mins of SPI trading is a pointless guide as its a very illiquid perod of time after the arbs have left the room. Most liquidity going through is punters rather than the serious boys.

Alas, we shall see in due course!

I disagree Nick, the commercials control the spi right into close and through the night (when they need to). A percieved strong close is likely to be nothing more than the big boys (Banks) churning the market. I know for a fact their typical play is to buy or sell their own physical stock while taking the opposite position on the futures market. Then reversing their position on the physical. The banks are big enough to move the whole market where they want on the smaller time frame and they collude with each other. i.e. MBA and USB were always working together.

 

[nunthewiser]

FWIW

i should point out that the big 4 are down today

 

[OzWaveGuy]

It's good to see the EW thread(s) getting back to normal (finally)

Today may be appropriate to highlight what some may consider to be a small triangle that has unfolded (at least so far, could still be more to come) on the XAO. In terms of the larger wave count I've been following here --> https://www.aussiestockforums.com/forums/showpost.php?p=486148&postcount=94 , this triangle may be a significant indicator for the potential completion of the bear market rally (or one significant leg of it).

The 4935ish area still holds some significance for me as there are some short term fib ratios that are hit based on the current wave count (as shown). Since the small wave (iii) is longer than wave (i), it's possible for this final wave (v) to be longer than (i) and (iii). The next 5 or so trading days should certainly reveal more of the unfolding wave count.

 

[Chris45]

It's good to see the EW thread(s) getting back to normal (finally)

Shhhhh! Is that the pitter patter of little troll hooves I hear in the distance?

 

[Nick Radge]

Okay, I get the gist of these projections. One of multiple scenarios that `could` unfold in a time frame beyond anyones knowing. Fantastic stuff.

Its not about knowing or projecting. Its about assessing past price patterns and what 'usually' follows. In March 2007, 'what usually follows' is a significant correction. If you take the time to look at my charts of that 2007 report that correction basically tagged the level we were expecting.

The rhetoric I hammered home at the March 2009 lows was "don't be a dick for a tick" meaning 100-pts here or there was not important to the bigger scheme of things.

The bigger scheme of things pattern 'that usually follows' such a decline was a counter trend rally toward 5000 - 5500.

It is not my intent to convert anyone to EW.

 

[nunthewiser]

It's good to see the EW thread(s) getting back to normal (finally)

Today may be appropriate to highlight what some may consider to be a small triangle that has unfolded (at least so far, could still be more to come) on the XAO. In terms of the larger wave count I've been following here --> https://www.aussiestockforums.com/forums/showpost.php?p=486148&postcount=94 , this triangle may be a significant indicator for the potential completion of the bear market rally (or one significant leg of it).

The 4935ish area still holds some significance for me as there are some short term fib ratios that are hit based on the current wave count (as shown). Since the small wave (iii) is longer than wave (i), it's possible for this final wave (v) to be longer than (i) and (iii). The next 5 or so trading days should certainly reveal more of the unfolding wave count.

so by that chart posted you are calling today as the base for the current retractment and calling it up from here

intresting stuff as it is yet again the complete opposite to my analysis in the XAO thread where i have pointed out my targets i am expecting to reach this week ..

are you trading this ?

intresting to see what unfolds here

 

[Jay70]

Its not about knowing or projecting. Its about assessing past price patterns and what 'usually' follows. In March 2007, 'what usually follows' is a significant correction. If you take the time to look at my charts of that 2007 report that correction basically tagged the level we were expecting.

The rhetoric I hammered home at the March 2009 lows was "don't be a dick for a tick" meaning 100-pts here or there was not important to the bigger scheme of things.

The bigger scheme of things pattern 'that usually follows' such a decline was a counter trend rally toward 5000 - 5500.

It is not my intent to convert anyone to EW.

Nick I agree with your analagy of the use of Elliot Wave and like all forms of analysis there are always different interpretations. Trading is more about managing risk than anything else.

Attached is a chart I posted over a week ago which is now calling for the possible W4 top to be in. Note the Fib retracement is in an excellent position to see this top (assuming my count is correct). I also like to look for important seaonal Gann windows where a trend change is expected. Coincidentally he has a strong seasonal time mid to late Sept. or 180 degrees (days) from the previous low. Like they say "timing is everything".

Todays noticable action on the spi looked like a squeeze into the close by the commercials to steal shorts, I was expecting more weakness. The US tonight could provide the first key as to where this market is at.

Now I'll be looking to technical support levels for first confirmation the W4 high could be in. Tomorrow the strong rising support on day data (on spi) is 4615. A wise and reputable Gann trader once told me "if support / resistance is tested for a 4th time it will nearly always go through". (i think the % was something like 90%) The next test of this line will be the fourth when it happens.

 

[Jay70]

The attached chart of spi 200 (30 min) showing a potential zig zag to 4880 (this is right on 61.8% retracement of wave 3 on my chart)

If it fails and falls below 4826 (61.8%) the likely action for mine is a tank through the support levels. Above the resistance line it should start to run.

A good low risk trade if your bullish with a stop below the 4826 or last nights lows at 4855.

 

[OzWaveGuy]

An incremental update to https://www.aussiestockforums.com/forums/showpost.php?p=490702&postcount=153

Note that the outlined target(s) could easily fail depending on the very short term wave counts that unfold. Simply using Fib and a EW channel to plot out a potential end of wave (v).

 

[Jay70]

The last 10 days has seen little of nothing apart from distribution opportunities for the commercials. Being short in waiting for the next larger move has been trying until now.

However the day chart of SPI200 attached has labelled yesterdays high as the take off point and W4 completion with the US action confirming this last night. These same waves mirrored on the XAO have an abc zig zag completing within 11 points over the entire up move.

Other confirming factors giving confidence in the labelling of the W4 completion is the outside day on the 23/9 on the S&P 500 which ironically is one of Ganns most important seasonal dates for trend change.(according to the late Neil Costa)
The speed of the up move is also typical W4 characteristics.

The wkly chart attached is simply the same chart as posted 3 weeks ago which was looking for the wave 4 completion. Now in.

Now we have some breathing space to sit back and continue to analyse the down move as it unfolds. I'm looking for an impulse wave or tripple zig zag to form and take out the March lows before April 2010. The main indication to void this labelling now will be up waves which exceed what is acceptable to an impulse wave down. Obviously the important technical support levels will be watched and will likely provide the basis of some of the corrective up waves within the larger down move.