Australian (ASX) Stock Market Forum

How low can the All Ords go?

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Well, Friday was certainly an interesting day if you believe the Australian Market simply follows the US markets. With a Higher trading volume, the end of wave (3) down has completed.

For many of you who follow Elliott Wave, this seemly small event places the XAO at pivotal juncture. Here's why:

1) If the XAO corrects into wave (4) and then heads down to complete wave (5) then the call for a significant low (1000-1500 points) will happen. Why? 5 wave corrections simply don't happen. Corrections must be at least 3 waves - hence if this first five waves does complete, then there will be the 'A' leg of a major A-B-C correction down. Expect 'C' to be similar in price action.

2) If the XAO does not form wave (4), and continues to climb into the price range of wave (2) (around 5200+) then something else is unfolding, either a more complex correction or the end of the bear market (if you believe confidence will suddenly be restored and all the financial problems disappear).

The chart below describes possible targets for wave (4) unfolding as a Flat or a triangle. Target of 38.2% retracement of wave (3) down at around 4300 points or even higher perhaps to a 50% correction. The initial leg up will hopefully give some clues as to what's unfolding.

Note that the wave (4) triangle scenario could call for the wave 'b' of the triangle to head lower than last friday's low. This same scenario occurred in the previous wave 4 triangle.

Also not discussed in the charts below is an alternate count that looks to take the index lower after a small correction to around 3700 points (or lower). This undocumented alternate count is a further subdivision of wave (3) down. For those EWers, I'm happy to discuss on the EW thread - but I'm particularly not fond of this scenario, but should still be in one's periphery vision nonetheless.

For those who are interested, much of what has been discussed here was discussed at the end of October here --> https://www.aussiestockforums.com/forums/showpost.php?p=358838&postcount=5586

The main difference is the wave labeling has been adjusted in the chart below to follow EW 'standards'.

In summary, it may be hard for longer term investors to leverage wave (4) but there should be opportunity for many as the wave (4) scenario should be larger than some of the more recent bounces. I'm also watching for new short term lows that may play out as discussed above.

Cheers
OWG
 

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Well im going 2 watch the 1.us economy at least show a sign of economic recovery,poss.1year or so away yet.2watch the oil 4 early signs of initial demand.3financials mildly recovering.4CRB index .as early signs of the asx recovering...and not until then. i feel all these boxes have 2 b ticked before i put my millions in and go long..;)
 
lol, actually rereading it ,well, i cant make sence of it as well.ill try again. reason for buying back in
1. dont worry about any fib level,just worry about the state of the US market,the asx wont improve until US does.
2.oil and financials will be the first indications of a rise from the ashes
3.CRB index ,commods will show first signs of global recovery.
Let me know if anyone doesnt agree,i dont mind at all.;)
 
I believe by the time the US economy is showing signs of recovery, demand for oil etc, the bottom will have long since been and gone.

Probably a year before.
 
Just finished reading the FIN REV. Comments like the US is 2/3 of the way through, middle of next year etc etc don't seem to support the "just around the corner".

Also been looking at weekly sector charts for past 2 years (as I learn). Does this look like it's bottoming? Just eyeballing the chart would suggest not yet.
 

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rederob said:
dhukka
Translating into simple English:
We are nearing a point that differentiates a recession from a depression.
My view is that the ingredients of a recession-proper have only recently finalised the mix; namely collapses of finance, housing and car industries.
These ingredients have not had time to influence the markets as they should. That is, a total collapse in confidence is beckoning.
I see markets in a weak state for a minimum 6 months, with a year a more realistic duration.
The allords should keep tumbling.
I'm seeing the 2k figure being reached early in 2009 with a dip under 2500 a reasonable outcome by mid year.
Click to expand...
Nothing has changed my position in the past few months.
If the US and China can get some major infrastructure stimulus underway in the next quarter, we might not hit 2500. However the flow through of decisions to products is typically beyond 6 months. So any recovery will only happen in the second half at earliest.
 
rederob said:
Nothing has changed my position in the past few months.
If the US and China can get some major infrastructure stimulus underway in the next quarter, we might not hit 2500. However the flow through of decisions to products is typically beyond 6 months. So any recovery will only happen in the second half at earliest.
Click to expand...

That may create a few jobs but wont speed up the unwinding of the financial problems globally.

Without the flow of credit in the economy's that consume nothing much will happen

If we are lucky we may go sideways with a couple of sucker rally's IMHO
 
it wasn't just the sub prim that has created the credit crunch, fixing the credit markets as in healing the banks will take years, its the consumer that has over leveraged through a housing bubble, its the Chinese imbalance of trade (the yens weakness to the us dollar) thats caused problems, there are many factors that have contributed to the credit markets collapses , the only way to fix the problem the easy way is to re inflate by killing the us dollars value reducing the value of debt in the process but also killing imports from other countries so America can regain trade balances.

i don't think hyperinflation will come but it will kill any bonds value in the market creating further credit issues for the yanks. there is also the reset of other honeymoon loans yet to come into effect in 2010, 2011 some will get caught out again with this if the economy isn't back on track by then.

china needs to change from a producer to a self consumer soon than later to see any positives in our commodities sectors, i don't see the stock market being cheap at the moment far too much has yet to play out globally.
 
XAO should get a rally over Feb / March 09 to about the 3900 - 4000 level. Around April (1st week), watch out this could be the month we see the next leg down...

As for the bottom, I would say around 1700 - 2000 by the end of 2009:D
 
Some random plucking of numbers here which require justification.

Please do so.

Cheers!
 
michael_t_f said:
The bottom will be when housing prices stabilize in the US and unemployment slightly decreases.
Long way off yet.
Click to expand...

The stock market is normally a leading indicator so it will begin to turn before the real economy shows any sign of improvement. As Kennas hinted, you guys just pulling numbers out of thin air, how about posting up some charts and a bit of commentary.
 
Sunday 25 January 2009

I will see if I can get copies of the All Ords, this week.

Let me say that an argument could be made for the Dow
to decline to as low as the 4,000 area, not that it
necessarily will, but it is within the realm of probability.
The message is, there is no hurry to expect a bottom
in the markets.

Just my opinion.
 
LRG said:
I subscribe to Huntley's who's view was that the Jan 22 low of 5200ish was the low to rally off to new highs going forward.

This has now proven not to be the case.

I have heard some say that it is now heading to 4700 before it bottoms.

I think maybe more downside over the next 6 months at least.

What do people think???
Click to expand...

Just read the first post to this thread. Just shows how the "experts" can be so wrong. "5200ish as the new low to rally off to new highs" - what a laugh!!

It's impossible in this climate to predict what is going to happen in the short term. Who would have thought that China's growth rate was going to go down to 6.9%? All the graphs and facts in the world aren't going to help us predict the future
 
Re: How low can All Ords go?

^^^^^^^^^^^^^^^^

wayneL said:
How long is a piece of string?

It is conceivable that the XJO could end up in the 3000s. I say this by drawing a line through the financials... the big banks etc.

If not for the resilience of the big miners, (and desperation measures from the Fed) we'd nearly be there already. IMO

If the miners come off 3000s are a dead cert.
Click to expand...

If you want an expert, how about listening to this guy? Better than the media 'experts' by a country mile and then some!!!!!!
 
if anyone is thinking a rise is due, where do you reckon we might head then ?
just trying to give myself a little false hope lol

jc
 
we will get to 4981 :rolleyes::rolleyes::rolleyes::rolleyes::rolleyes:


"Some random plucking of numbers here which require justification.

Please do so.

Cheers! "
 

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