When do you expect the next Correction?

[Garpal Gumnut]

Fibonacci Retracements are displayed by first drawing a trendline between two extreme points (i.e., a significant trough and peak). After selecting Fibonacci Retracement from the Insert menu, a series of up to nine horizontal lines will be drawn at the Fibonacci levels of 0.0%, 23.6%, 38.2%, 50.0%, 61.8%, 100%, 161.8%, 261.8%, and 423.6%.
After a significant move (either up or down), prices will often rebound and retrace a significant portion (if not all) of the original move. As the price retraces, support and resistance levels will often occur at or near the Fibonacci Retracement levels.

Dear gorilla, This is from MStock interpretation of fib retracement. Garpal

 

[theasxgorilla]

Indeed...but what the chart shows is an extention measured as a retracement, which is kind of odd to me...not to say it's not useful, just that I don't know how to interpret it.

 

[IFocus]

“So whats the typical retracement?”

Sorry CanOz the crystal ball is on the blink

“That's the thing! The way it's been drawn it's an extention of a retracement that is actually an extention. I see how it lines up at the 161.8% level, but I'm not sure what it means.”

Gorilla it just means to me that price may react to the level, given the last candle that raise’s the possibility a little. What will happen? No idea the market will do what it wants.

Focus

 

[Garpal Gumnut]

Agree, I think the extension developed from Elliot's use of it in extending his 5th wave. The son of Bonacci would probably be twirling in his grave but the extension to now would be a bit eerie should something happen to cause a crash next week. Garpal

 

[CanOz]

“So whats the typical retracement?”

Sorry CanOz the crystal ball is on the blink

“That's the thing! The way it's been drawn it's an extention of a retracement that is actually an extention. I see how it lines up at the 161.8% level, but I'm not sure what it means.”

Gorilla it just means to me that price may react to the level, given the last candle that raise’s the possibility a little. What will happen? No idea the market will do what it wants.

Focus

I think this would be a good time for Nick to post the latest chart on the XJO from his website.

He may have done so already in another post.

Enough said.

Cheers,

 

[coyotte]

Quote by Glenn Neely

" No matter how good I got at wave theory , my trading was good some of the time and not good some of the time, " Neely explains. "The world of forecasting is is completely different from trading. To get good at trading you basically have to give up the forecasting business. That was a profound revelation for me because my whole career, my whole life, was founded on my ability to predict markets really well. "


Always Remember :
You don't need to know what will happen next

Cheers
Coyotte

 

[wayneL]

Quote by Glenn Neely

" No matter how good I got at wave theory , my trading was good some of the time and not good some of the time, " Neely explains. "The world of forecasting is is completely different from trading. To get good at trading you basically have to give up the forecasting business. That was a profound revelation for me because my whole career, my whole life, was founded on my ability to predict markets really well. "


Always Remember :
You don't need to know what will happen next

Cheers
Coyotte

So true.

 

[nioka]

If May 2007 is as good for me as was May 2006 I will be happy. It is all in the choice of stocks and whether you are investing or dealing in them.
There are plenty of stocks which can stand a general market fallback. Take AGM for instance. It will be more profitable when production commences and will still be profitable even if the price of nickel falls dramatically. Take ADI it will surge if Sugarloaf proves profitable,regardless of the general market trend. CML and WOW will continue to trade profitably and are safe havens.
It is the speculative uranium stocks which I believe will be hit hardest especially those which haven't a chance of getting into production in the near future.
Those with fully leveraged stocks receiving calls will suffer in any reversal.
On the positive side there is a steady stream of super funds looking for a home and these will even things out.
Nobody should have to worry too much in the next year or so unless they take high risk options trying to get rich too soon(which can happen during the best of times).
Summing up. Things are OK. Expect minor corrections regularly. A major one,in my opinion is some time off.

 

[Garpal Gumnut]

If May 2007 is as good for me as was May 2006 I will be happy. It is all in the choice of stocks and whether you are investing or dealing in them.
There are plenty of stocks which can stand a general market fallback. Take AGM for instance. It will be more profitable when production commences and will still be profitable even if the price of nickel falls dramatically. Take ADI it will surge if Sugarloaf proves profitable,regardless of the general market trend. CML and WOW will continue to trade profitably and are safe havens.
It is the speculative uranium stocks which I believe will be hit hardest especially those which haven't a chance of getting into production in the near future.
Those with fully leveraged stocks receiving calls will suffer in any reversal.
On the positive side there is a steady stream of super funds looking for a home and these will even things out.
Nobody should have to worry too much in the next year or so unless they take high risk options trying to get rich too soon(which can happen during the best of times).
Summing up. Things are OK. Expect minor corrections regularly. A major one,in my opinion is some time off.

I feel May and June 07 will be huge bull months in the asx as seniors grab their tax free inputs to super. The ASX 200 i feel will nefit the most with the top 20 experiencing bullish advances. this I feel will occur even if Wall St. , Nikkei and other markets tank. Garpal

 

[tech/a]

So true.

Agree with both you and coyotte.

The main advantage I see is the ability of knowing WHERE you are when taking or exiting a trade relative to both longer and shorter term analysis.

Trading a corrective move (If recognised) isnt the best option.
Exiting a bullish move during a pause (rather than a correction) could leave a lot of profit on the table.

Holding a position and not recognising that the last bull run was the end of a major wave can result in the same scenario.

Its just analysis---because it has a method of measurement forward doesnt make it less valid that those that are based upon hindsite statistics.

Rather than seeing it as tops and bottoms see it as the point your at on the map at that moment in time.

This form of analysis should be read in conjunction with other confirming analysis. The goal is to maximise opportunity both on entry and profit retention.

 

[>Apocalypto<]

the way it has jumped off the sep/ oct trend line a pull back is on the cards in my view its on a real vertical short term line now.

but will it be like that week in Jan or like May 06 that's up to the market to decide!

I say bring it on, new entry points! :knightrid

 

[Kauri]

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[rico01]

I think it will be about May 7/8 just after tradefest just like last year [12/5/06]when louise Bedford said "" Who,s not 100% invested in the market now ,It,s the most exciting time to be in it now!"" ,and you guessed it , that was the start of our correction last year. I don,t know if she,s invited back this year

 

[>Apocalypto<]

I think it will be about May 7/8 just after tradefest just like last year [12/5/06]when louise Bedford said "" Who,s not 100% invested in the market now ,It,s the most exciting time to be in it now!"" ,and you guessed it , that was the start of our correction last year. I don,t know if she,s invited back this year

LOL that is great ha ha ha ,

maybe she was short and it was all a stunt!

cha ching!!

on a serious note

Today on the sanford options board:

XJO ASX200

calls traded 2238 Puts traded 8217 now that does not look so optimistic! Or am i missing somthing now it's reporting time?

 

[wayneL]

calls traded 2238 Puts traded 8217 now that does not look so optimistic! Or am i missing something now it's reporting time?

Put/Call ratio is usually a contrarian indicator, but is useless on its own. I must be looked at in the context of its own history.

A better measure is the ratio of the total of all equity puts and calls. FWIW

 

[>Apocalypto<]

Put/Call ratio is usually a contrarian indicator, but is useless on its own. I must be looked at in the context of its own history.

A better measure is the ratio of the total of all equity puts and calls. FWIW

I understand what you are saying as that ratio is in favour of the uptrend as every one is writing puts!

but when so many puts are bought it also is saying something if it's just about even or 100 more to other side i don't think to much but when there are thousands more i take notice!

 

[2020hindsight]

probably this saying is well known to experienced traders around here, but I post it anyway.
Alan Kohler on this morning's ABC Inside Business program... "with the surge tide, all boats rise. But someday no doubt the tide will go out, and expose some of those boats with barnacles, and many swimmers without togs"

(PS he didnt say whether he was still buying - or whether he was double-checking the chord in his togs for that matter.)

 

[jemma]

probably this saying is well known to experienced traders around here, but I post it anyway.
Alan Kohler on this morning's ABC Inside Business program... "with the surge tide, all boats rise. But someday no doubt the tide will go out, and expose some of those boats with barnacles, and many swimmers without togs"

(PS he didnt say whether he was still buying - or whether he was double-checking the chord in his togs for that matter.)

That saying is taken from Warren Buffet, 'when the tide goes out we will see who is swimming naked'. Great quote, I predict March as a correction.

 

[Atomic5]

Isnt the traditonal investment cycle based on the saying "go away in May and don't come back until St Ledger's day". (I believe that St Ledgers Day is in late September.)

If you look at last year that is exactly what the market did. It has to do with summer holidays in the Northern Hemishpere, something you might not understand if you live in Australia and are never snowed in for months with cold mawing at your ankles.

Once the sun's out, so is the money, out of the stockmarket .... better things to do ,.... ?!

 

[2020hindsight]

April 1 maybe
PS I notice 2% of votes say that the market will continue to go up indefinitely.
as they say, optimists may not be as accurate in their predictions as pessimists, but they are usually happier.

BUT - I guess if it gets to the point that 2% can't afford togs, then they maybe should prepare to lose their modesty.

As for the analogy to barnacles on boats left stranded at low tide - Isn't that what they do in Darwin anyway - saves paying slipway fees to do the antifouling. - Just as long as the tide comes in again!

My own portfolio has certainly been through some "Darwinian" tidal ranges in the last 12 months.