Hi OzWaveGuy, your last count is what I have also. I think we've just started a B to test support around 3450, then we'll have a C back up to 4200-ish
Elliott wave works in 5 waves up followed by 3 waves down (in its basic interpretation). However, what does it mean when 5 waves up followed by 5 waves down at the same degree can be seen?
The market action today can be viewed in different ways.
One interpretation (currently preferred and shown below) is that the thrust out of the Double 3 (wave b circle) has now completed. This thrust has traversed 61.8% of wave 'a' circle (the thrust preceding the double 3) which is a solid Fibonacci relationship between waves traveling in the same direction. In addition, one could interpret 5 waves up is complete assuming the double 3 ended a little sooner than previously discussed (shown). Using the basic Fibonacci relationships within this latest thrust - wave (iii) is almost 161% of wave (i) and wave (v) is almost 138% of wave (i).
Also, another compelling argument is that 5 small waves down from yesterday's high is complete.
As a personal note: I exited all long positions yesterday, not because of this analysis on the XAO (which I just finished tonight), but because the wave structure on the XMJ didn't seem to support further upside. One of the reasons I'm bearish on the XAO in the short term for further downside is that a triangle appears to have formed as wave 'b' circle on the XMJ (on the XAO it was a double 3). As many EWers know, a triangle implies an impending change in trend (or correction) is at hand.
Since the completion of the XMJ triangle (will post something later on this), 5 waves up can be considered completed.
I was sorta kicking myself for not picking up on this potential scenario on the XAO a little sooner, but the wave between the end of the double 3 - wave 'e' and the end of wave (i) appeared to be a 3 wave move - however looking at a smaller time scale, it clearly shows a 5 wave move with wave 5 the longest wave.
There are other interpretations (an ending diagonal), but as it stands tonight, the wave structure appears to count best as shown below. Therefore its highly possible that the XAO won't see the 4000 point mark in the short term.
Graeme, in the scenario you describe, what type of correction do you think will play out? It's possible that a flat could play out to take it above 4000.
The market action today can be viewed in different ways.
One interpretation (currently preferred and shown below) is that the thrust out of the Double 3 (wave b circle) has now completed. This thrust has traversed 61.8% of wave 'a' circle (the thrust preceding the double 3) which is a solid Fibonacci relationship between waves traveling in the same direction. In addition, one could interpret 5 waves up is complete assuming the double 3 ended a little sooner than previously discussed (shown). Using the basic Fibonacci relationships within this latest thrust - wave (iii) is almost 161% of wave (i) and wave (v) is almost 138% of wave (i).
Also, another compelling argument is that 5 small waves down from yesterday's high is complete.
As a personal note: I exited all long positions yesterday, not because of this analysis on the XAO (which I just finished tonight), but because the wave structure on the XMJ didn't seem to support further upside. One of the reasons I'm bearish on the XAO in the short term for further downside is that a triangle appears to have formed as wave 'b' circle on the XMJ (on the XAO it was a double 3). As many EWers know, a triangle implies an impending change in trend (or correction) is at hand.
Since the completion of the XMJ triangle (will post something later on this), 5 waves up can be considered completed.
I was sorta kicking myself for not picking up on this potential scenario on the XAO a little sooner, but the wave between the end of the double 3 - wave 'e' and the end of wave (i) appeared to be a 3 wave move - however looking at a smaller time scale, it clearly shows a 5 wave move with wave 5 the longest wave.
There are other interpretations (an ending diagonal), but as it stands tonight, the wave structure appears to count best as shown below. Therefore its highly possible that the XAO won't see the 4000 point mark in the short term.
I guess that strictly speaking the pattern suggested is illegal as waves (a) through (e) need to all be corrective waves and waves (a) and (c) are in fact impulse waves. I have probably answered my own question but would like your opinion as well.
Based on the recent market movements since Friday and following on from here --> https://www.aussiestockforums.com/forums/showpost.php?p=382786&postcount=303
Using some of the basic EW assumptions here --> https://www.aussiestockforums.com/forums/showpost.php?p=381327&postcount=296
One could make some assumptions: If a 5 wave move downwards is unfolding, the end point would end up around 3393 points. Following would be a 3 wave correction followed by 5 more waves down (probably to a new low) to complete wave B, before heading back up to wave C
Hi OWG,
I may not be correctly understanding what you are saying. I hope that you are not saying that corrective wave (4) was completed last week and we are starting a 5 wave move down terminating as wave (5)
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