ZFX - Zinifex Limited

[toothfairy]

Hi Nick,
As I mentioned before with wavepicker that ZFX sp is affected a lot by POZ, I can't see its sp will go down to anywhere near $14 if POZ stays around US$15/lb (or higher). If you can say POZ also will go to as low as US$12-13, then your prediction is possible.
If ZFX goes to $14 @ the present POZ, I will put $100,000 in.
Cheers.

 

[machi]

Mag,
If your reference to the Fischer method is at me then you are correct. I'd even go further to say that I'm more aligned with Miner rather than Fischer. Prechter is a great analyst and more so a theorist but I feel there is a major step between that and trading which Miner has grasped. As others have said, what ever you feel works for you. My public record with EW trading (shorts & longs) is +45% in 7-months.

Anyway, this thread is not on the semantics of Elliott Wave or mine being bigger than yours but rather ZFX. Here is my short term view on ZFX. A break up through $18.28 would probably render this immediate view incorrect.

This post may contain advice that has been prepared by Reef Capital Coaching ABN 24 092 309 978 (“RCC”) and is general advice and does not take account of your objectives, financial situation or needs. Before acting on this general advice you should therefore consider the appropriateness of the advice having regard to your situation. We recommend you obtain financial, legal and taxation advice before making any financial investment decision.

Past performance is not a reliable indication of future performance. This material has been prepared based on information believed to be accurate at the time of publication. Subsequent changes in circumstances may occur at any time and may impact the accuracy of the information.

Hello Nick, thanks for sharing for opinion regarding Zinifix.

I have been trying to apply Elliott Waves for 4-5 years now and perhaps not as seasoned as you.

One aspect in the above labelling did catch my eye though, and that is the way you have labelled wave iv. Is this suppost to be a triangle? If so does not a triangle break down into Elliott 5 smaller waves a-b-c-b-d-e, whereas your analysis breaks it into a 3 wave move??

It seems an assumption has been made here, and in order to have the most objective wave count then one must label in the basic tenets of Elliott as the smaller wave structures should be building blocks for the bigger wave structures. In my opinion in order for a count to show some validity and a chance of being correct, then the smaller waves have to "add up".

Jus my opinion

Regards

 

[wavepicker]

Mag,
If your reference to the Fischer method is at me then you are correct. I'd even go further to say that I'm more aligned with Miner rather than Fischer. Prechter is a great analyst and more so a theorist but I feel there is a major step between that and trading which Miner has grasped.

Hi Nick, I have studied the works of Fischer some 5 years ago. If we are talking about the same text it deals primarily with the application Fibonacci relationships for trading and to a lesser extent the basics of EW. The last chapter describes the pioneering and application of a logarithmic spiral to determine turning points in the market. I programmed this technique and used it for quite a while, but have made greater advances in other areas and have since discarded it.

For pure EW I would never go past Prechter and EWI. He is a great trader and broke the record in the US trading championships in 1984. (444% return in 4 months in options) Although his subscription services at EWI primarly look after retail and insitutional investors, but also caters for traders as well.
IMO they have the best resources for EW traders in terms trading signals and in particular education.


Cheers

Wavepicker

 

[barney]

Hi Lads, As you know I am still learning my TA, but I'm getting a few right lately, so I thought I'd put myself in the firing line on ZFX (again) . I was going to put this in the "Improving Chart Analysis" thread, but its predominantly about ZFX anyway.

Firstly, I know next to nothing about EW theory, but appreciate the chance to learn a bit about it off you guys. I'll stick to basic TA for the moment.

ZFX to me looks like it is coming off a double bottom on RSI with divergance on the sp. This often signals a spike up (This has in fact already happened)

BUT, ... I think the market in general is looking like a slight retrace is on the cards. It has gone hard and steep for a month and a half. Fridays slight sell off may be a pre-curser to a further drop next week.

That being the case, I see the recent turn around on ZFX to be short lived. IMO it may rise a little more this week (maybe low $17's), but I would expect a medium correction back to $16 (support level) in the near future.

Once that retrace is out of the way, I think it will be full steam ahead for another month or so (beware the May-June correction ..... people are creatures of habit!!)

Of course the market may rally next week instead of retracing, which I believe would only change the timing/price levels of the above analysis, but not the general pattern.

Have a good weekend all.

 

[Magdoran]

Mag,
If your reference to the Fischer method is at me then you are correct. I'd even go further to say that I'm more aligned with Miner rather than Fischer. Prechter is a great analyst and more so a theorist but I feel there is a major step between that and trading which Miner has grasped. As others have said, what ever you feel works for you. My public record with EW trading (shorts & longs) is +45% in 7-months.

Anyway, this thread is not on the semantics of Elliott Wave or mine being bigger than yours but rather ZFX. Here is my short term view on ZFX. A break up through $18.28 would probably render this immediate view incorrect.

This post may contain advice that has been prepared by Reef Capital Coaching ABN 24 092 309 978 (“RCC”) and is general advice and does not take account of your objectives, financial situation or needs. Before acting on this general advice you should therefore consider the appropriateness of the advice having regard to your situation. We recommend you obtain financial, legal and taxation advice before making any financial investment decision.

Past performance is not a reliable indication of future performance. This material has been prepared based on information believed to be accurate at the time of publication. Subsequent changes in circumstances may occur at any time and may impact the accuracy of the information.

Hello Nick,


Actually I was referring to some of the EW charts I’d seen around on various threads a lot of late by newer EW players, and the way they seemed to be counting the waves. I observed that many of these charts were not taking into account patterns and wave counts for example along the lines of the chart wavepicker posted which started this discussion. The styles I saw reminded me of the count and pattern approaches of Robert Fisher.

I have heard of Miner, but as yet have not researched his works, hence some interest in a synopsis from your perspective would be appreciated. As you well know EW has many different approaches that have been pioneered from the 1930s as, like the Fibonacci schools with people like Robert Rhea for example. I have compared Gann and Fibonacci increments for a few years now in concert with Prechter/Frost EW approaches, and am still pioneering various methods.

I have to say though that I still consider myself fairly much a junior in EW theory with a lot of gaps in my EW knowledge that I have yet to study and then use in practice successfully to my level of satisfaction (some might call this level intermediate depending on their perspective since I’ve spent a few years studying EW. I’m a very tough task master, and I’d only consider myself “advanced” if I was at wavepicker’s level).

So, having established that Robert Miner’s works are a gap in my EW knowledge, I take it that your style is primarily based on his methods from your comments, is this correct? How then would you compare his interpretation of Elliott to Prechter/Frost’s works, that would be interesting?

I’m not sure why you felt compelled to cite your public record in your post (which is undisputed – I’m sure your many years of trading at Macquarie stands as a testament to your commitment), or saw this as a debate in EW semantics, and I certainly do not see this as an ego contest – no one has a monopoly on any body of knowledge – there’s always something new around the corner, isn’t there? Constructive dialogue and discussion would be the way I’d characterise the “polemic” so far (said with a wry smile).

My impression is that many of the newer EW posters seem to be missing key concepts in their analysis from what I’ve seen, missing key building blocks that Prechter covers in depth, which is covered extensively by EWI for example as suggested by wavepicker. But I accept that with any body of knowledge, that different styles and “schools” will develop each with their unique leanings and preferences, which is fine by me. I’m all for diversity, and each trader I believe is on a personal journey of discovery…

So, on topic, I actually think in contrast to your focus on the ZFX chart alone, that Zinc is critical to ZFX’s price action, and that the commodity chart is more reliable to work with from an EW perspective. So, I’ve attached my current thinking on Zinc below, but with time points included. The actual way the waves play out of course may differ to the structure I’ve provided here, but the time cycle I think is currently valid. Hence some highs and lows should come in around the key dates if my reading is correct…


Regards


Magdoran

 

[rederob]

Magdoran
Next week is Chinese new year and consumers will be away from the market.
Any downside to zinc should be sooner rather than later.
On the flip side zinc had its biggest warrant cancellation of the year, so outflow numbers may put off short players.
Fundamentally zinc inflow rate and volumes have withered substantially into 2007.
If this trend remains over the fortnight then it may be that "spare" zinc will no longer prop up prices, and LME drawdowns continue to be the theme from March.
I place a high probability on slight price declines in the next fortnight, with similar high probability on substantial price increases into the second quarter.

A fly in the ointment will be ZFX's report on Thursday, and whether or not it exceeds expectations. Given that zinc price weakness only crept in during the latter part of the December quarter, statistically there will be a substantial increase in q on q profit. If simple minded analysts "read" this as indicative of an even better second half then ZFX will quickly gather pace.
I won't predict market reaction to the announcement, as I don't regard markets as rational: A good recent example was the carnage applied to Boom Logistics, and the subsequent formidable rebound.

I reckon one way or another there is a great chance to milk a strong price movement on Thursday if you have quick fingers. I'll be earning an honest day's living elsewhere.

 

[michael_selway]

Magdoran
Next week is Chinese new year and consumers will be away from the market.
Any downside to zinc should be sooner rather than later.
On the flip side zinc had its biggest warrant cancellation of the year, so outflow numbers may put off short players.
Fundamentally zinc inflow rate and volumes have withered substantially into 2007.
If this trend remains over the fortnight then it may be that "spare" zinc will no longer prop up prices, and LME drawdowns continue to be the theme from March.
I place a high probability on slight price declines in the next fortnight, with similar high probability on substantial price increases into the second quarter.

A fly in the ointment will be ZFX's report on Thursday, and whether or not it exceeds expectations. Given that zinc price weakness only crept in during the latter part of the December quarter, statistically there will be a substantial increase in q on q profit. If simple minded analysts "read" this as indicative of an even better second half then ZFX will quickly gather pace.
I won't predict market reaction to the announcement, as I don't regard markets as rational: A good recent example was the carnage applied to Boom Logistics, and the subsequent formidable rebound.

I reckon one way or another there is a great chance to milk a strong price movement on Thursday if you have quick fingers. I'll be earning an honest day's living elsewhere.

"On the flip side zinc had its biggest warrant cancellation of the year"

how many tonnes and where?

http://www.basemetals.com/stocks.aspx

thx

MS

 

[Magdoran]

Magdoran
Next week is Chinese new year and consumers will be away from the market.
Any downside to zinc should be sooner rather than later.
On the flip side zinc had its biggest warrant cancellation of the year, so outflow numbers may put off short players.
Fundamentally zinc inflow rate and volumes have withered substantially into 2007.
If this trend remains over the fortnight then it may be that "spare" zinc will no longer prop up prices, and LME drawdowns continue to be the theme from March.
I place a high probability on slight price declines in the next fortnight, with similar high probability on substantial price increases into the second quarter.

A fly in the ointment will be ZFX's report on Thursday, and whether or not it exceeds expectations. Given that zinc price weakness only crept in during the latter part of the December quarter, statistically there will be a substantial increase in q on q profit. If simple minded analysts "read" this as indicative of an even better second half then ZFX will quickly gather pace.
I won't predict market reaction to the announcement, as I don't regard markets as rational: A good recent example was the carnage applied to Boom Logistics, and the subsequent formidable rebound.

I reckon one way or another there is a great chance to milk a strong price movement on Thursday if you have quick fingers. I'll be earning an honest day's living elsewhere.

Thanks rederob,


And this is precisely why it’s an “Ace in the hole” to have a good FA person that knows their stuff on your T/A team.

Great, then this may have just been the top for this little drive up, and could see a pull back immediately as shown in the modified chart.

As for ZFX, you are quite right, the reaction to the earnings could do anything.

For the XAO I have 23-24 Feb as a key time point, and suspect we may see a top of some sort come in here. It may be a major or a minor pull back if my cycle analysis holds true (XAO index target is 6025.31, or 6078.40 – in that order) or the next critical time I see is 01 April depending on how the market plays out.

Hence may see a rally into the 23 Feb. How ZFX will behave is uncertain. 22 Feb is a key day in it’s cycle, which lines up exactly with the report oddly enough (I think this is a coincidence).

I can see the cycle working in ZFX, but can’t give a high probability short term direction yet. The move down recently could be an “ABC” which is corrective, and not impulsive, meaning ZFX should move higher.

However, if zinc moves down, and the market makes a high on Friday, it would make sense that ZFX may follow the downward move in the short term as outlined by Nick Radge. Another key day for ZFX appears to be 31 March… I can see how zinc might move, but can’t really project for ZFX currently, and need to see how it pans out the next couple of weeks.

Long term, I tend to agree with you, we are still in a commodity bull cycle, and I suspect that the recent major high in Zinc was the end of a larger wave 3, hence the wave 5 in a commodity could be well above this level. The problem is timing. How long will the decline last, how long will the basing last, and how much momentum would a wave 5 have, and for how long? Too early for me to forecast this currently – but I’m working on it.

Thanks for the excellent FA analysis, much appreciated.


Regards


Magdoran

 

[Nick Radge]

machi,
You are quite right in that it's not a typical EW triangle. This is my point with Miner verse Prechter. The practical application of a triangles are these "micro" triangles. Very rarely do we see a completed EW triangle, but we see a tonne of these and from a practical trading application, that is all I require. Take a look at FUN as an example - long on Thursday into a wave-5. Whilst I bend the theory on what constitutes a specific triangle, I stay with the guideline that a triangle cannot be seen in a wave-2. I adapt the theory into what my own market experiences have taught me.

Here is my Zinc chart for what its worth.

Regards

 

[rederob]

Magdoran
US market is closed Monday, and DOW/NYSE were flat last night.
Gold and silver were also flat, while base metals were mixed in thin trading and with minimal ranges - zinc was 2cents down - and oil was up.
My suspicion is that our allords will not be moving and shaking, especially as the bogey of 6000 was touched on Thursday, and a "breather' seems in place.
My reckoning is that these factors cannot produce much upside for our local equities on Monday/Tuesday, so immediate downside (perhaps just muted) is a high probability.

Nick
Try overlaying your e/w count of the allords over zinc/ZFX.
I would work off the countertrends for timing inflections.

 

[Halba]

hi rederob

i agree with your views on zinc. it looks to have slowed down remarkably, much like copper though not as bad as copper

stockpiles seem to have stabilised, and the drawdown rate is pathetic. This can change however.

 

[michael_selway]

hi rederob

i agree with your views on zinc. it looks to have slowed down remarkably, much like copper though not as bad as copper

stockpiles seem to have stabilised, and the drawdown rate is pathetic. This can change however.

Hi about 400 was canclled on fri! its down to 86275!

thx

MS

 

[machi]

machi,
You are quite right in that it's not a typical EW triangle. This is my point with Miner verse Prechter. The practical application of a triangles are these "micro" triangles. Very rarely do we see a completed EW triangle, but we see a tonne of these and from a practical trading application, that is all I require. Take a look at FUN as an example - long on Thursday into a wave-5. Whilst I bend the theory on what constitutes a specific triangle, I stay with the guideline that a triangle cannot be seen in a wave-2. I adapt the theory into what my own market experiences have taught me.

Here is my Zinc chart for what its worth.

Regards

Thanks for that explanation Nick, funny enough in my experience I have never come across what yourself/Miner call "micro triangles". For example in the above chart of Zinc your wave 4 triangle wave d is higher than wave b. In studying Elliott’s works I have never come across situation. Usually the wave you have labelled d, I would label as b. this would make the triangle a rather "skewed" one than expected. On occassion wave b of a triangle is exceeds wave 3 and that RN Elliott called a "running triangle" and means that the triangle will most likely terminate earlier than normal.
I know what I am saying is quite trivial because the end result is the same, a triangle wave 4 and then a wave 5 to follow.

What are these micro patterns you speak of? Is it not easier to drop down to smaller time frames such as hourly charts and examine the EW micro trends there?

Incidentally I wonder how many people other than WP saw this last top in Zinc/ZFX? Not many I bet.

KInd Regards

Machi

 

[rederob]

Hi about 400 was canclled on fri! its down to 86275!
thx

MS

MS
If "on warrant" zinc went from 90,550 to 86,275 the next day then I would regard the decline as a tad more than 400tonnes.
For your info, some 4,575 tonnes were cancelled overnight, 3,775 at Singapore.
Good luck with counting your fingers and toes!

 

[michael_selway]

MS
If "on warrant" zinc went from 90,550 to 86,275 the next day then I would regard the decline as a tad more than 400tonnes.
For your info, some 4,575 tonnes were cancelled overnight, 3,775 at Singapore.
Good luck with counting your fingers and toes!

hehe typo missed a "0"!

thx

MS

 

[trendsta]

ZFX price is moving up nicely...

I wonder if its because market is expecting larger dividend than forecast.. or if the chief is going to disclore positive info about divesting smelting operations.

 

[mahmoodf]

What is the forceast dividend expected to be?

 

[michael_selway]

What is the forceast dividend expected to be?

EPS(c) PE Growth
Year Ending 30-06-07 319.8 5.3 45.5%
Year Ending 30-06-08 266.3 6.3 -16.7%

Earnings and Dividends Forecast (cents per share)
2006 2007 2008 2009
EPS 219.9 319.8 266.3 182.5
DPS 80.0 184.0 145.1 78.9

thx

MS

 

[GreatPig]

Tomorrow could be interesting.

GP

 

[rederob]

EPS(c) PE Growth
Year Ending 30-06-07 319.8 5.3 45.5%
Year Ending 30-06-08 266.3 6.3 -16.7%

Earnings and Dividends Forecast (cents per share)
2006 2007 2008 2009
EPS 219.9 319.8 266.3 182.5
DPS 80.0 184.0 145.1 78.9

thx

MS

MS
I really do appreciate your best efforts.
So how about something original, eh?