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XJO--What if the majority are wrong?--Maybe this isn't the top!

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Re: XJO--What if the majority are wrong?--Maybe this isnt the top!


Tech, one function that AGet has, is it allows you too look at charts inverted. Although initally this may sound strange, it adds another perspective to looking at the charts. Especially when all we have focused on is a bull drive in the last 4 years and we are so used to seeing that.
I have numbered this chart, but the rising MACD in comparison to the overall fall in price on the chart(or I should say actual rise in price!!) as well as a break above the offset average and trend channel, is probably more along the lines of the semi mechanical EW approach Tom Joseph promotes to use with AGet. Although the computer generated wave labelling is cr.p, so I have put in my own interpretation, which is probably along mre with the spirit of the EWP. The giveway is the type of pattern in wave 4 that the move that followed this pattern was terminal. The only and hardest question was the timing element for the completion

Generally after an impulse finishes generally it's a guideline that the entire correction finishes at the "span of the previous 4th wave" OR only the first leg of the correction finishes or finds support there(ie wave A). Given that the long term third wave started in 1987, I will let you do the sums as to where this might end. But we should not even bother looking that far in advance just yet(as it may well not turn out that way due to future market patterns saying otherwise) Just taking it move by move is hard enough. Not gonna fully stick my neck out here, but it's quite plausible that 3rd wave(of lower degree than the reds) will follow this first move down from all the high. Usually we get what I call a "mirror image foldback" pattern back to the base of the 4th wave.

Take a look at post #543, these charts have similar patterns (apart from the ED in ZFX)

https://www.aussiestockforums.com/forums/showthread.php?t=2971&page=28&pp=20



Cheers
 

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Re: XJO--What if the majority are wrong?--Maybe this isnt the top!

tech/a

So what you are presenting is your opinion. That's fine. I have absolutely no problem with opinion.

I was simply expecting some evidence. Now I can let my breath out.

jog on
d998
 
Re: XJO--What if the majority are wrong?--Maybe this isnt the top!

Hmmm, one thing's for sure Tech - you're bound to be right with one of your two opposing viewpoints of late, viz viewpoint 1: market won't reach 6,000 again in a long time or viewpoint 2: this isn't the market top.

Why the sudden need to prognosticate furiously?
 
Re: XJO--What if the majority are wrong?--Maybe this isnt the top!

MichaelD said:
Why the sudden need to prognosticate furiously?
Click to expand...
I actually think this has been going on for some time Michael. I did notice an earlier post of yours being critical of those attempting to chart the XAO during this correction. I think you will find this analysis has been going on for some time, not just because of the correction. And, it's been going on as a point of interest and learning tool in the use of T/A and particularly EW. Many have benefited from it I think, and will be able to apply this knowledge to assist in their investment decisions.

(please note the XAO analysis thread started in Oct 06)
 
Re: XJO--What if the majority are wrong?--Maybe this isnt the top!


You will find that if there is in fact a bear campaign at some stage:

-most market participants will quickly become disinterested and forget about the market, especially as most will lose $$
-the ones that stick it out and persevere will become more interested in alternate methods other than fundemental such as TA and Charting.
 
Re: XJO--What if the majority are wrong?--Maybe this isnt the top!

MichaelD said:
Hmmm, one thing's for sure Tech - you're bound to be right with one of your two opposing viewpoints of late, viz viewpoint 1: market won't reach 6,000 again in a long time or viewpoint 2: this isn't the market top.
Click to expand...

As there are various ways to analyse the Market and as this particular view hadnt been voiced---thought Id bring it up.

Adds to discussion.
Gets some people thinking.
Is interesting to watch how things pan out.

Why the sudden need to prognosticate furiously
Click to expand...

Dont know that its a need.
But as I saw it---thought it interesting---so thought I'd share.

Seems that voicing various views is seen by some as
Indecision
Confusion
Procrastination

Rather than
Possiblity.
Thought provoking
Forward planning (what if scenarios).

Hell without an enquiring mind how on earth does one grow, accumulate knowledge or learn from successes and mistakes?

Seems to be a lot of selected reading by some.

This is my point.

The above is purely a WHAT IF---its hypothetical---it is NOT PROVEN.

CURRENT analysis presented by Elliot wave practitioners IS CURRENTLY PROVEN and until price action PROVES the CURRENT analysis to be incorrect it must be presumed to be correct.

The basic roots of analysis Fundamental/Technical or any other in my view.
 
Re: XJO--What if the majority are wrong?--Maybe this isnt the top!

If this is only a correction then there is nothing to say that tech/a's view/opinion is any more valid or invalid than anyone elses. Only time will tell, as we watch the market activity unfold into the future. Looking at things with an open mind doesn't hurt.

If everyone thought the same way, the world would be dull and boring.

When the majority of people form a particular view of the market, it can sometimes be an indicator that the market is setting up to do the opposite. Being contarian can be profitable.

If a new higher top is formed then the question would arise as to whether it will be short-lived or not.

As tech/a as observed there is a a lot of selected reading and people have picked up on a particular school of thought or approach. This appears to limit their view as to how they perceive the market.

If you go back to the old classics, it is interesting the overlap of approaches that were developed and used, which some people are either unaware of, aren't understood, or are only just starting to learn. There are people who work at using, combining and/or refining these approaches to improve their approach to trading.

Even in EW if you read the original works of RN Elliot as presented by Prechter, or Neely and the Neely extensions or Miner and his approach. As an aside Neely has an interesting approach to charting and how to represent EWs.

You can even identify the original approaches and the overlaps of Gann's, Livermore's, Miner's work and that of others, covering the areas of cycles, including time and price projection.

An enquiring mind is needed to grow and develop knowledge and skills. Staying within the domain of the flock (sheep/crowd), is really the domain of the underachiever whether it is related to trading or other pursuits.

If tech/a is right people will call him a hero/guru, if he is wrong mmm...that will be interesting. But, at least he is prepared to present his opinion.

If people don't agree then present the counter argument.

Cheers.
 
Re: XJO--What if the majority are wrong?--Maybe this isnt the top!


100% agree with your first statement.

My only comment on people being prepared to put forward their opinions is with regards to psychology. Correct me if I'm wrong, but tech/a does not currently have any open positions against the XJO. If you have open positions and you're making predictions and you go out in the world and start to argue those opinions...then you must have rock solid psychology. Trading is largely an individual endeavour. ALL of my best trades have been when the only person who knew I was in them was me.
 
Re: XJO--What if the majority are wrong?--Maybe this isnt the top!

lesm said:
If people don't agree then present the counter argument.
Click to expand...
My argument is simply that prediction is completely unnecessary and in fact downright harmful to one's trading expectancy.

To me, I see that various schools of technical and fundamental analysis come in and out of favour simply because they happen to fit the events of the last few weeks/months. When they stop fitting, they are discarded and the next holy grail is sought.

You don't need to be right all the time to be profitable, just to be able to skew the risk:reward in your favour, and analysis isn't the key to this, it's trade management after you've entered - cutting the losses short and letting the winners run.
 
Re: XJO--What if the majority are wrong?--Maybe this isnt the top!


Exactly, the classic technical (I use the word technical loosely as it is more akin reading tea leaves) analyst's reasoning: If something doesn't happen, then something else will. How can you ever be wrong?

Tech/a has stated before that his trading strategy relies upon a rising market. Is it suprising then to see him come up with evidence to support the continuance of a bull market?
 
Re: XJO--What if the majority are wrong?--Maybe this isnt the top!


I agree with what your saying, but systems trading is not for every1.
Though i do personally believe its the easiest way to trade - and possibly the most profitable - ed seykota trades purely mechanical and has returned 60%pa over the last 20-odd years - Buffet i think closer to 30%pa.
 
Re: XJO--What if the majority are wrong?--Maybe this isnt the top!

MichaelD said:
My argument is simply that prediction is completely unnecessary and in fact downright harmful to one's trading expectancy.
Click to expand...
Michael,

I agree with you with respect to prediction being unnecessary. Ignoring a lot of the noise on a forum and accepting it for what it is should have no impact on anyone's trading.

This kind of market tends to bring a lot of predictions out, another forum that I frequent has made a similar observation.

People are just being people, no more - no less.

Cheers,
Les.

PS: Good to see you post the WMT trade. Looked like it may have been a good learning experience
 
Re: XJO--What if the majority are wrong?--Maybe this isnt the top!

nizar said:
systems trading is not for every1.
Though i do personally believe its the easiest way to trade
Click to expand...
I'm not sure I agree with this. I think it's probably the hardest way to trade since it requires you to remove your emotions from the trading process. We as humans find this extremely difficult to do, since it is our natural tendency to think we "know better" than our trading plan. All is fine whilst a bull run is on, but then when the market changes, all of a sudden we want to override our carefully constructed and tested plan.

Trading emotionally is in my view why most traders fail - they experience initial success in a bull market by grabbing profits quickly and hanging on to losers and never get beyond this. When a bear market comes, they are wiped out.
lesm said:
People are just being people, no more - no less.
Click to expand...
Indeed, which is why I'm pushing the psychology barrow harder and harder to try and understand the reasons behind this observed behaviour.
 
Re: XJO--What if the majority are wrong?--Maybe this isnt the top!

Maybe the "horror of horrors".

If the EW Monthly & Weekly disagree then is there a possibility that the XJO is NOT in a EW pattern at all !!!!

But I don't know where the NEW "evidence" came from, as this " evidence" was pointed out earlier in the week --- it was old hat by the time Tech found it.


Cheers
 
Re: XJO--What if the majority are wrong?--Maybe this isnt the top!


Unless a fifth wave failure occurs and that could signal the beginning of a potential bear market.
 
Re: XJO--What if the majority are wrong?--Maybe this isnt the top!

Found the following 'opinion-analysis' on the London Stock Exchange, and like Tech/a's hypothetical, we don't have a time frame for the next possible 'top'.

http://www.londonstockexchange.com/...tcommentary/schwartzlatest/currentarticle.htm

[excerpt]
written 6th March 2007 (after the 1st dip & before the second dip)

Which point of view should we trust in? History offers this objective perspective. [...]

Since 1980, there were 64 short-term declines of at least five per cent. . In other words, short-term sell-offs occur much more often than most investors would guess. The length of time between the end of one short-term correction and the start of the next is a little over three months, on average

Even during bull markets the gap between the completion of one correction and the start of the next is about five months, on average.

Viewed from this angle, there is nothing very special about the suddenness of the current down-turn, despite the headlines. February 19 marked the completion of a slightly longer-than-average rally that had been running since the last big sell-off ended in mid-June 2006. History tells us the current sell-off was a bit overdue.

History also teaches that sell-offs like the current one typically occur in a bull market. Let us put a little flesh on this issue.

There were 26 occasions in the last few decades when a healthy sell-off occurred after a lengthy rally like the one that ended on February. A bull market continued after 25 of these 26 brief sell-offs.

We all know that our stock market is affected by forces outside of our control in places like New York, China, the Middle-East. Even so, past trends hint that the current bull market is not yet over.

On the other hand, history also warns us to be cautious during the next month or so. It is not common knowledge but the average short-term decline in the last quarter-century ran for 32 days.

Just seven of the 64 (or11 per cent) ended within 10 days.

No guarantees of course but the historical odds suggest there is more downside to come before this sell-off runs its course.

Looking further into the future, history warns us to monitor the length of time that the next rally runs. Short bounce-back rallies can be an important warning sign that the bull market is over.

By way of example, there were 16 occasions since 1980 when a sell-off like the one we are currently in was followed by a bounce-back rally that ended within 20 trading days. All but two of them were associated with a bear market.

Viewed from this perspective, the length of the next rally is worth monitoring very carefully.

Remember, written 6th March ....
 
Re: XJO--What if the majority are wrong?--Maybe this isnt the top!

Here's a thought - what if we are in a period where all the various flavours of TA don't work (as well as before in a trending market), and the markets are lurching up & down on the whim of daily events ie TA systems are in limbo. I found that the further you go into a particular TA system the more confused you get when the market is not trending. This is evident in the somewhat polarised views here.

Daily events now seem to be making a mockery out of TA as I'm sure you'll agree that unless you have some extraordinary powers of seeing into the future none of us know with any certainty what tomorrow will bring.

Maybe it's a period where it's better to trade the fact (fundamentals) & try not to pedict the future (TA)?.

As to the thread, I think the majority are still bullish eg "good buying opportunity; the market always goes up in the long term etc etc". Personally I have my doubts, but unless China has a meltdown and/or super money suddenly vanishes then the Oz market still has some life left. The US is another matter....
 
Re: XJO--What if the majority are wrong?--Maybe this isnt the top!



Doom.
Your reply is one which is often echoed by those who have little understanding of technical analysis and even less knowledge as to CORRECT application of that analysis.
There are certain forms of technical analysis which has a forward projection aspect to it.
However projection of price isnt/shouldnt be the primary objective of technical analysis.Even novive Technical analysts are frustrated by the market dynamics which will alter analysis from day to day.
Here application of analysis becomes important---many have a basic knowledge but FEW have the knowledge to apply technical studies to their trading---in a way which will help them toward CONSISTANT profit.

To make the riddle even worse. Its NOT THE ANALYSIS---technical OR Fundamental which will ensure/maximise or bring consistency to trading profits.

From a fundumantal veiw Duc's exercise has shown that even an experienced fundamental practitioner can get the valuations of companies he invests in up to 50% of the "Value" of a good buy! WRONG.

Every form of analysis is right until PROVEN wrong---thats the way to trade ALL analysis---but you must have a point in which you can un catagorically say---ITS WRONG.
 
Re: XJO--What if the majority are wrong?--Maybe this isnt the top!


Sorry Dr Doom but this seems extremely facile, and how can you post this after everything else that precedes you in this argument? It verges on silly....
 
Re: XJO--What if the majority are wrong?--Maybe this isnt the top!

Atomic5 said:
Sorry Dr Doom but this seems extremely facile, and how can you post this after everything else that precedes you in this argument? It verges on silly....
Click to expand...

The crux of T/A should be relatively simple (IMO). People over complicate it (once again IMO) because it makes them feel more in control, or some such. Doom raises a valid question...and in consideration of the fact that corrective moves are the mosts difficult to count using EW it's even more valid in the context of this thread. At what point do you step back and say, 'the volatility and noise here is too extreme to make trading a trend practical'. Even Tech/a hiimself re-posted from another forum comments from an experienced system trader who advised that when price is below the short M/A yet still above the long, you are in essentially non-trading territory and you should not trade your signals...at least that is how I interpretted that post.

On the XAO (not the XJO, but near enuff) I use a 40-day SMA as my short and a 200-day SMA as my long. Price has been aggressively shifting back and forth across the 40-day SMA for over a week now. To my mind it's really in that, 'I'm going to chew you up and spit you out mode'. Any trade taken ATM is higher risk, by my estimation.
 
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