XAO Technical Analysis

[Porper]

One more wave up to complete a generational Elliott structure?
It's difficult to label the higher degree count that this would create without more data, but the S&P also feels like it has one more substantial wave before a generational market top.
Youd think this Wave 4 down would find good support around 5600.

View attachment 90012

One of the 3 Elliott rules that can never be broken is that wave 4 can not break down through wave 1 which is the case in your red count. Also corrective patterns must not be straight line moves (your waves 2 & 4 in blue. I'll put a chart up on my take tomorrow. Bottom line is the patterns higher look corrective which is not a good sign. This has been the case off the 2009 lows.

 

[$20shoes]

oH YEAH. How silly of me to miss that easy rule!! Thank you Porper.
Your other pickup suggests they cant be straight line moves - even though I can see a very quick ABC in them, I think youre suggesting they look too impulsive?

And I think I know what youll come back with, which is the entire structure from 2009 lows is an ABC correction. But yes, would love to see your take on it. Much appreciated...and sorry about the mistake ladies and gents

 

[Porper]

oH YEAH. How silly of me to miss that easy rule!! Thank you Porper.
Your other pickup suggests they cant be straight line moves - even though I can see a very quick ABC in them, I think youre suggesting they look too impulsive?

And I think I know what youll come back with, which is the entire structure from 2009 lows is an ABC correction. But yes, would love to see your take on it. Much appreciated...and sorry about the mistake ladies and gents

You don't have to apologize shoes, we are all here to learn. Elliott Wave is down to interpretation as you know.

Yes, too impulsive for the corrective patterns and too choppy during most of the rallies.

 

[$20shoes]

You don't have to apologize shoes, we are all here to learn. Elliott Wave is down to interpretation as you know.

Yes, too impulsive for the corrective patterns and too choppy during most of the rallies.

Thank you. Yes I do agree. I think I have a bias because in the longer term picture I want the structure to fit inside that channel. But I cant even move my red wave 3 to the end of August 2018 - that run doesnt feel impulsive enough to support this hypothesis. I can see what youre saying - the entire move up from 2009 lows looks corrective. In which case, we should be worried.

But yes if you have time for a chart later, that would be appreciated!

 

[Porper]

But yes if you have time for a chart later, that would be appreciated!

This is my take on the weekly chart. 6490 is significant as a push above means the rally higher off the Feb. 2016 lows cannot be a wave B as it will be greater than 1.382x the length of -A. This is a guideline only but normally holds true. If the wave count is correct, a lot of pain coming. Best case is that 6490 is taken out as the count would be more bullish. Not likely i.m.o.

 

[Porper]

This is my take on the weekly chart. 6490 is significant as a push above means the rally higher off the Feb. 2016 lows cannot be a wave B as it will be greater than 1.382x the length of -A. This is a guideline only but normally holds true. If the wave count is correct, a lot of pain coming. Best case is that 6490 is taken out as the count would be more bullish. Not likely i.m.o.View attachment 90038

My above chart is the XJO...not XAO. Same patterns but different levels obviously.

 

[kid hustlr]

Wow Porper that's a bearish outlook if we get to there!

I've long held the view that as a market we've needed a 'cleansing' of market leaders. Our index is so heavily weighted to the big resources stocks and the banks that for me a much healthier index make up would lead to IT/Healthcare/Industrial/Consumer stocks taking on more leadership qualities.

Where are this countries market leaders (CSL is the best example!)

 

[$20shoes]

Thanks Porper. Thats actually different to the corrective pattern I had in my mind.
What your count suggests - and correct me if Im wrong - is that we may put in a bearish (B). Then up in 5 waves to complete (C). And then from there, with the way you have labelled your waves, we would have to then continue a downtrend? This will all unfold across many years of course, but it paints a bleak picture. That's possible of course, as we may be weighed down by the S&P500 unwinding.

 

[Porper]

Thanks Porper. Thats actually different to the corrective pattern I had in my mind.
What your count suggests - and correct me if Im wrong - is that we may put in a bearish (B). Then up in 5 waves to complete (C). And then from there, with the way you have labelled your waves, we would have to then continue a downtrend? This will all unfold across many years of course, but it paints a bleak picture. That's possible of course, as we may be weighed down by the S&P500 unwinding.

Yes, that's about the sum of it. As for the downside target it depends if a running or expanded flat pattern completes. The prior could terminate around 5200 with the latter nearer 4400. No way of knowing yet, but a 5 wave leg lower should unfold which will provide the clue. Unless 6490 is overcome in which case it's up and away again.

 

[$20shoes]

Yes, that's about the sum of it. As for the downside target it depends if a running or expanded flat pattern completes. The prior could terminate around 5200 with the latter nearer 4400. No way of knowing yet, but a 5 wave leg lower should unfold which will provide the clue. Unless 6490 is overcome in which case it's up and away again.

Thanks again for your time, Porper. Grasping how alternative wave counts might be unfolding is something I still struggle with - I think this comes with experience. Well I hope!

 

[Porper]

Thanks again for your time, Porper. Grasping how alternative wave counts might be unfolding is something I still struggle with - I think this comes with experience. Well I hope!

It does come with experience but Elliott Wave isn't the Holy Grail. I believe it's best used in conjunction with other forms of analysis. Just my personal preference. There are only 3 core rules with the theory. These must always be met...then run with the wave count that abides by as many guidelines as possible. This provides the most clarity.

 

[andymac]

thankyou Porper and others for the interesting posts. i agree with your count Porper. just for fun i like to to do the maths, so my guess is maybe 4520 (xao), for a low this would be 50% retrace of wave (A) 2009-2015 and, if we were to get a fairly textbook 5 waves down from the 6481 hi with the first wave completing now and being 38% of the whole 5 waves down, this also comes in around 4520's. but as i said i just like to do the math i try to trade only what is in front of me.

 

[Logique]

Great thread everyone.

I see mention of potential downside targets 5200 or 4400 on Elliot Wave predictions. If so, there would be a long way to go yet!

6400 - 5200 = -18.7%
6400 - 4400 = - 31.2%

 

[gartley]

This is my take on the weekly chart. 6490 is significant as a push above means the rally higher off the Feb. 2016 lows cannot be a wave B as it will be greater than 1.382x the length of -A. This is a guideline only but normally holds true. If the wave count is correct, a lot of pain coming. Best case is that 6490 is taken out as the count would be more bullish. Not likely i.m.o.View attachment 90038

Hi porper good chart!!))

It sure has been a messy corrective move up from March 2009. Corrective waves are tricky because there can be so many variations thereof. I can't see a new high , in fact the overall long term patern looks very bearsish in terms of EW and I think we are in the early stages of larger degree wave C here. Worse case scenario is we ultimately go back down and re test the 2009 March lows.

 

[InsvestoBoy]

This is my take on the weekly chart. 6490 is significant as a push above means the rally higher off the Feb. 2016 lows cannot be a wave B as it will be greater than 1.382x the length of -A. This is a guideline only but normally holds true. If the wave count is correct, a lot of pain coming. Best case is that 6490 is taken out as the count would be more bullish. Not likely i.m.o.View attachment 90038

So when you're doing these counts, it looks like you're using the cash chart?

You probably realise the dividend adjusted chart looks quite different?

Doesn't it completely change the counts? This is ASX:STW, which is tracking XJO not XAO but I am guessing dividend adjusted XAO would look the same, i.e. quite different from your chart...



This chart doesn't even include franking credits which would push the return even higher.

 

[andymac]

hi investoboy , just cruising in your vicinity. so short answer is yes different count for different chart. we were looking at cash charts as they are the charts of markets we are trading. sometimes associated charts will have similar or different counts, and although counts may vary outcomes can be similar.
however- what i did notice is your chart of STW is different to mine, which makes it look more different to cash. i just checked with another data source and both of them have 2007 hi at 6652. your chart shows it at around 5400??? on my chart stw does not look that different to xjo or xao

 

[gartley]

Looking at things from a time analysis perspective. Downtrend should persist until the next cycle point low 18 in about Feb 2019 if one takes this chart at face value. Cycle points only shown positions in time and disregard position relative to y axis.

https://invst.ly/9378y

 

[Logique]

Big week ahead, traders will be watching closely.
The outcome of US mid terms will be significant. As will Apple's share price, will it rally. If volatility subsides, we may some traders tempted to wade back in, the Aussie XVI is off it's recent highs

 

[InsvestoBoy]

hi investoboy , just cruising in your vicinity. so short answer is yes different count for different chart. we were looking at cash charts as they are the charts of markets we are trading. sometimes associated charts will have similar or different counts, and although counts may vary outcomes can be similar.

The point is, the cash charts are lower specifically because the underlying securities paid out a lot of dividends since 2007. So if you don't adjust for those dividends, of course the return will look stunted and more like a corrective pattern. What you are charting is simply not a reflection of reality.

You've got gartley saying they won't see a new high when in fact we already saw one.

Porper has been saying EW has a bunch of hard rules and soft guidelines...I am no EW expert but I don't think it can be called a "corrective" wave if it recently made an all time high...

however- what i did notice is your chart of STW is different to mine, which makes it look more different to cash. i just checked with another data source and both of them have 2007 hi at 6652. your chart shows it at around 5400??? on my chart stw does not look that different to xjo or xao

Yeah, because my chart is adjusted for dividends (and ETF fees), and yours is probably not.

 

[Porper]

Porper has been saying EW has a bunch of hard rules and soft guidelines...I am no EW expert but I don't think it can be called a "corrective" wave if it recently made an all time high...

View attachment 90140

You can break through all-time highs within a corrective pattern. Yes, I stick to the cash charts (just my preference), but not including dividends still presents plenty of impulsive (strong) price action. It certainly isn't all corrective.