The Elliott Wave Analysis Thread

[Nick Radge]

biggles,
Yes, and I think it ordinary. It was quite a let down in my view. Dynamic Trading by Robert Miner remains a favorite of mine.

 

[OzWaveGuy]

Wave (4) Flat
For wave (4) to be a flat (or a triangle) then the smaller wave 'B' down should end soon. The smaller waves within this last leg are providing some useful information as discussed last week--> https://www.aussiestockforums.com/forums/showpost.php?p=400076&postcount=452

3223 Target Area
3223 on the XAO is a Fibonacci target area where two levels meet. Fib ratios of wave 'a' circle down and smaller wave 'iii' meet at this point (as shown). The evidence also supports a small 5th wave extension as discussed in the previous post, making 3223 a realistic target considering the evidence at hand (in addition, from a TA standpoint, the XAO will form a double bottom)

Alternate Count
I have introduced an alternate count as well that sees wave (4) already completed. Whilst this is definitely a possibility, I don't put much weight on this alternate count as it would mean the larger wave (4) is a simple zig-zag correction that only lasted 70% of the time wave (2) took to correct. There is an expectation that time will influence wave (4) more than price, as wave (2) in Mar 08, was influenced more by price than time and retraced just over 50% of wave (1). For reasonable alternation between corrective waves and using Elliott Wave as a guide, then this 4th wave should take longer to unfold (although this is not mandatory).

XAO falls off a Cliff
It should also be noted that another count also exists: If the XAO 'breaks' aggressively downward, and wave (4) ends up being the simple zig-zag, then I would be inclined to show wave (4) as a wave 2 instead. This means more subdivisions are unfolding and we are at the start of wave 3 of (3) - a highly aggressive leg in EW terms. This implies the XAO would tumble off the edge of a cliff.

 

[Rudy]

XAO falls off a Cliff[/B]
It should also be noted that another count also exists: If the XAO 'breaks' aggressively downward, and wave (4) ends up being the simple zig-zag, then I would be inclined to show wave (4) as a wave 2 instead. This means more subdivisions are unfolding and we are at the start of wave 3 of (3) - a highly aggressive leg in EW terms. This implies the XAO would tumble off the edge of a cliff.

Hi OWG,

I tend to favour the above scenario as I am quite bearish on the S&P500. Last night the S&P500 closed at 743.3 just above a critical level of 741. The main support below that level is around the 637. I currently have the S&P500 in wave 3 of wave (5) so expect it to break through the 741 level in the medium term even if there is a bounce tomorrow.

That would drag our market down with it. I acknowledge that you don't look at other markets to support your current EW counts on the XAO.

 

[OzWaveGuy]

Hi OWG,

I tend to favour the above scenario as I am quite bearish on the S&P500. Last night the S&P500 closed at 743.3 just above a critical level of 741. The main support below that level is around the 637. I currently have the S&P500 in wave 3 of wave (5) so expect it to break through the 741 level in the medium term even if there is a bounce tomorrow.

That would drag our market down with it. I acknowledge that you don't look at other markets to support your current EW counts on the XAO.

I would say today's XAO action completed wave B down. Not quite hitting 3223, but not far away either . Will now need to see if the other alternative counts will play out. Breaking higher now and beyond the wave 'b' circle end point @ 3500 should confirm wave 'c' circle up.

As for other markets (and I've probably mentioned this before), how do you define their influence on the XAO. Some days there 'appears' to be influence and other days there's not. The XAO should have been down a lot lower than 19.1 points after the DOW last night if you believe markets must influence each other in this way. They DO get in sync esp when they are both in 5 wave moves, but quickly fall out of sync as well.

Remember when the XAO 'led' the rest of the world on Nov 21st last year? The XAO had finished 5 waves down and moved into positive territory even after an extremely poor night on the DOW and S&P500. The global social mood is negative (for a myriad of reasons), so the markets will fall, just not always in sync as much as one may like.

Cheers

OWG

 

[Rudy]

As for other markets (and I've probably mentioned this before), how do you define their influence on the XAO. Some days there 'appears' to be influence and other days there's not. The XAO should have been down a lot lower than 19.1 points after the DOW last night if you believe markets must influence each other in this way. They DO get in sync esp when they are both in 5 wave moves, but quickly fall out of sync as well.

Remember when the XAO 'led' the rest of the world on Nov 21st last year? The XAO had finished 5 waves down and moved into positive territory even after an extremely poor night on the DOW and S&P500. The global social mood is negative (for a myriad of reasons), so the markets will fall, just not always in sync as much as one may like.

Cheers

OWG

Hi OWG,

I have been studying the XJO and S&P500 for many years now and it is obvious that one is not an identical twin of the other. The patterns are quite different over a number of years however to suggest that our markets are totally isolated and de-coupled defies common sense from a fundamentals perspective.

There are times when the two indices are more closely connected than other times. At the current time their major turning points are reasonably closely coupled even though the resultant patterns are different. I think that it is perfectly reasonable to say that it is unlikely that the US would be in a major impulse wave down (by major I mean in terms of time period) whilst we are in a major impulse wave in the opposite direction.

All I say is that the US market has a significant influence on not only our market but also most other markets in the industrialised world purely because we do have a global economy and what affects the US will more often than not have an influence on what happens to other global economies who trade with the US or are otherwise economically connected to the largest consumer on the planet.

 

[OzWaveGuy]

Hi OWG,

I have been studying the XJO and S&P500 for many years now and it is obvious that one is not an identical twin of the other. The patterns are quite different over a number of years however to suggest that our markets are totally isolated and de-coupled defies common sense from a fundamentals perspective.

Rudy,

I'm not sure I can really answer all your question/statements here. But here goes...

Firstly, Your assertion that I have indicated that the markets are totally independent is incorrect. Analyse them independently. Period. Don't let other market actions interfere with your EW analysis - It won't work, so ignore it.

The dependency between the markets of the Global economy is purely human - namely social mood. The world is progressing and each market progresses individually. The social mood can be influenced (eg credit boom since the 70's for much of the western world) and if the resultant markets get in sync for periods of time - so be it.

Your assertion that economies like Australia and the US should be reasonably close (at least by a few years) is incorrect. It simply doesn't have to be that way - looked at the Japan v's the US charts over the last 29 years? These are the largest economies in the world (or at least Japan was in the top 2) so you'd think they'd both roughly be in sync. They are divergent, and only coming into sync for small periods of time. Why couldn't Australia or any other country be in the very same position v's the US?

In the future, I wouldn't be surprised at all if the Chinese and Japanese lead the world out of the coming depression, whilst the US and other countries deteriorate for years to come (so perhaps Japan and the US markets will effectively swap their relative economic positions as the social mood increases in Japan and declines in the US - who knows, only theorizing).

 

[nunthewiser]

In the future, I wouldn't be surprised at all if the Chinese and Japanese lead the world out of the coming depression, whilst the US and other countries deteriorate for years to come (so perhaps Japan and the US markets will effectively swap their relative economic positions as the social mood increases in Japan and declines in the US - who knows, only theorizing).

amen

 

[OzWaveGuy]

Ok EWers. 1st prize to anyone who can see a very recent double 3 correction on the XAO - it's small but it's there. Was discussed for a few weeks not long ago, so put your skills to the test.

It may even provide a hint on the direction of the XAO tomorrow.

 

[nunthewiser]

wants a prize without pointing at double 3,s or chatting EW with ya

XAO heading south tommorow

all personal opinion of course

prolly wrong ,happy not to be

 

[nunthewiser]

Ok EWers. 1st prize to anyone who can see a very recent double 3 correction on the XAO - it's small but it's there. Was discussed for a few weeks not long ago, so put your skills to the test.

It may even provide a hint on the direction of the XAO tomorrow.

so whats your thoughts on tomorrow?

 

[OzWaveGuy]

so whats your thoughts on tomorrow?

Is it too late to respond on this one?

 

[nunthewiser]

Is it too late to respond on this one?

no not at all . wouldnt mind hearing your thoughts on direction for tommorow ie friday

 

[OzWaveGuy]

no not at all . wouldnt mind hearing your thoughts on direction for tommorow ie friday

Triangle is forming (part of a small zig-zag correction upwards). Either the last leg of this wave 'b' triangle is done already or just about to (maybe back down to 3290) before a push up to around 3350 commences (hopefully today). Whether this upwards zig-zag correction is part of a more complex correction upwards is unclear.

Either way. Once the zig-zag finishes @ the assumed 3350, a correction downwards will follow.

For the EWers. This means the wave (4) flat is out. The remaining possibility for wave (4) is a triangle or a double correction (or something more ominous to the downside). A break below the recent low will bring the alternative wave count front and center.

There is a very small chance that a rare (and bizarre) megaphone shaped 5th wave extension is occurring upwards - and to much greater upside, but I'll leave that on the sideline for the moment.

 

[OzWaveGuy]

Ok EWers. 1st prize to anyone who can see a very recent double 3 correction on the XAO - it's small but it's there. Was discussed for a few weeks not long ago, so put your skills to the test.

It may even provide a hint on the direction of the XAO tomorrow.

No takers? A fair number of people read this thread - no EWers left?

 

[biggles]

I'm looking but can't see a recent one. A double 3 being an a,b,c W, X, a, b ,c Y.

 

[OzWaveGuy]

Wave (4) Flat gone! Triangle?
For the wave (4) flat to be valid, 5 waves up needed to occur after the completion of the 'B' wave down. This didn't occur, but instead it appears a small triangle as part of a zig-zag correction upwards is underway and this immediately removes the flat scenario - as we need 5's up, not 3's.

The small triangle is most likely a 'b' wave of a zig-zag, so the remaining leg up needs to occur to around 3350 (161% of the 'a' leg up)

Red Flag - XAO at Pivotal Juncture
This corrective move up is very bearish for the XAO. So either wave (4) is a triangle and this 'C' leg up is going to be a flat or a complex correction (which makes sense as the 'A' and 'B' legs are zig-zags) OR a smaller wave (ii) is about to complete (alt count) with severe downside consequences.

Once this small correction finishes (possibly tomorrow), then a break below the alt (i) end point will almost certainly confirm further downside targets. The only saving grace for the XAO should the alt (i) level be broken is for an expanded flat scenario to occur for wave 'C' up (or part thereof), which is not uncommon for a leg in a triangle.

Once the short term moves complete, then there should be some reasonable clarity on the next major move. This is certainly not a positive situation for the XAO right now, you might need to hold onto your hat shortly

Cheers

OWG

Note: Small double 3 shown on chart.

 

[Rudy]

Ok EWers. 1st prize to anyone who can see a very recent double 3 correction on the XAO - it's small but it's there. Was discussed for a few weeks not long ago, so put your skills to the test.

It may even provide a hint on the direction of the XAO tomorrow.

Hi OWG,

Forgive me, I have attempted to respond to your question on the XJO instead of the XAO. They are pretty close in action anyway.

Would the double 3 correction perchance be the following one ?

 

[Porper]

Hi OWG,

Forgive me, I have attempted to respond to your question on the XJO instead of the XAO. They are pretty close in action anyway.

Would the double 3 correction perchance be the following one ?

View attachment 28268

Hello Rudy,

In my opinion what you have labelled is more like a double zig zag, that is an a,b,c down, 3 waves up to an "X" wave, then another zig zag.You are spot on in labelling it W,X,Y though.

Double 3's tend to be sideways corrections mainly because only 1 zig zag is allowed.

Also worth remembering is that wave B must retrace at least 20% of wave A.I don't trade ASX stocks so don't have data otherwise I would post a chart.Maybe somebody will post the double three that Wavepicker has shown close up.

 

[biggles]

HI Porper, you can get the chart here for free. I hope this link works. I can't work out how to write on it. Need hubbies help when he gets in
http://www.quote.com/global/stocks/...CANDLE&chartUi.size=800x550&chartUi.minutes=3

 

[Rudy]

Hello Rudy,

In my opinion what you have labelled is more like a double zig zag, that is an a,b,c down, 3 waves up to an "X" wave, then another zig zag.You are spot on in labelling it W,X,Y though.

Double 3's tend to be sideways corrections mainly because only 1 zig zag is allowed.

Also worth remembering is that wave B must retrace at least 20% of wave A.I don't trade ASX stocks so don't have data otherwise I would post a chart.Maybe somebody will post the double three that Wavepicker has shown close up.

Hi Porper,

I do agree with you there Porper. I was trying to find a double 'anything' and the closest thing that I could find was that double zigzag. Taken in the larger scheme of things I am more inclined to think that we are currently in an impulse wave down. The following is a chart that I had prepared earlier in the day which shows what I mean.

The only fly in the ointment is the fact that my wave (iv) has gone into the price range of my wave (i) so it's possible that we have yet another extension within the 3rd wave in my impulse move down.