Forum Replies Created
-
Posts
-
ASX 200 @ Fri 20 Jan 17 – Reassessing the alternative count
Was the alternative count ruled out too soon?
See the DAILY chart. The red rectangle highlights the target topping range for the alternative count if the positions of wave-cc’s 3rd and 4th are elevated to the next higher pivot.
Fully compliant with Elliott Wave Theory for a five wave move, wave-cc’s internal ratios are 100:214:84 (five wave moves typically play out as 100 : min 162 : 62-100).
This week the index breached the presumed 4th wave low at 5665 (magenta horizontal) after reversing from within the target range, potentially indicating a longer lasting top. The reversal also occurred at the top of the trend channel from Feb 2016.
Please note that:
• The labelling in the chart has been altered to reflect a potentially bearish double three combination upward correction (W-X-Y);
• Nothing in the price action to date rules out the bullish count to 7000 although confidence in this count is waning.US Dollar Index @ Thu 5 Jan 17
The MONTHLY chart shows the index encountering resistance in the 103-104 target range for the 3-wave rally from 70 in March 2008 (red horizontals).
Confirmation that this rally has topped is a breach of the wave-4 low at 92 (magenta horizontal).
US Dollar Index @ Wed 4 May 16 – Intraday
The MONTHLY chart shows the working count for the price action since the bottom at 70 in March 2008 that projects a top around 103 (red horizontal).
It’s possible that wave-(C)’s 5th topped at 100 last December when the index pushed to a slight new high, technically sufficient to complete the 8 year rally. But since the top labelled wave-3 a credible A-B-C correction has played out into yesterday’s 92 bottom.
If the count shown is correct, look for wave-5 of (C) to top around 103 (red horizontal).
ASX 200 @ Fri 23 Dec 16 – Alternative count
An alternative to the seemingly implausible count projecting a top around 7000 sees the current 5-wave rally from the low on November 4th topping around 5660 (red horizontal).
This alternative count disregards the US election-induced down-spike on November 9th. The sell-off from the August high is instead deemed to have bottomed at 5178 on November 4th, labelled wave-B on the DAILY chart.
If this alternative count is correct a top is near. Confirmation would be a breach of wave-C’s 4th wave low at 5510 (magenta horizontal).
The two alternatives are easily distinguished – the bullish 7000 count sees the current 3rd wave powering higher without violating a pivot low to around 6520 before the 4th and 5th play out into a top around 7000.
If the down-spike is disregarded, it also weakens the case for the bullish 7000 count as wave-2 no longer retraces wave-1 by a textbook 61.8%.
Today’s breach of the 5611 August 1st high supports this mid-November forecast …
ASX 200 @ Tue 15 Nov 16
The July 8th update projected a ‘topping target around 5630’. The MONTHLY chart shows that pattern topping at 5611 on August 1st.
That rally and the subsequent sell-off are counted as the 1st and 2nd of a potential five wave rally (ending diagonal). An early heads up was given when wave-2 retraced a textbook 61.8% of wave-1.
If correct look for a wave-(C) top around 7000 (red horizontal).
ASX 200 @ Fri 8 July 16
From the April 19th update: “If the count shown from the Feb low plays out look for an A-B-C rally to top around 5800”.
The DAILY chart counts (A) & (B) in place and wave-(C) now underway. Note the support provided by the gold 200 day moving average.
The 1-2 count shown for wave-(C) lowers the topping target to around 5630 (red horizontal).
SPX @ Fri 8 July 16
From April 2015: “The starting point for the wave-(C) ending diagonal has been repositioned … the topping target is now 2130”.
The MONTHLY chart shows wave-3 topping at 2134 in May last year and wave-4 bottoming in February, retracing a text book 30% of wave-3.
The target range for the top is 2130 (red horizontal) to 2310 (where wave-5 = wave-1).
US Dollar Index @ Wed 4 May 16 – Intraday
The MONTHLY chart shows the working count for the price action since the bottom at 70 in March 2008 that projects a top around 103 (red horizontal).
It’s possible that wave-(C)’s 5th topped at 100 last December when the index pushed to a slight new high, technically sufficient to complete the 8 year rally. But since the top labelled wave-3 a credible A-B-C correction has played out into yesterday’s 92 bottom.
If the count shown is correct, look for wave-5 of (C) to top around 103 (red horizontal).
ASX 200 @ Fri 22 Apr 16
Reconciling US stock price action with earnings is challenging at present.Total earnings for all S&P 500 components topped at US$105.96 in the September 2014 quarter and have fallen every quarter since at an accelerating rate. The December 2015 quarter’s US$86.53 earnings were down 18.3% from the peak and 4.6% from the previous quarter.
Yet this week’s S&P 500 high was just 1% below its all-time-high, an unsustainable level if earnings continue to fall.
So what are the implications for the ASX 200 if the overbought 3 month rally in the US markets rolls over and follows deteriorating earnings down?
The ASX 200 has fallen 12.7% since its March 2015 top, more closely tracking its own total earnings decline. Although last week’s update showed a count projecting a rally top around 5800 there is an equally valid bearish count shown on the attached DAILY chart that projects a bottom around 3160.
It’s just too difficult to call at this point. An earnings turnaround would favour the upside move; further earnings deterioration would favour the downside.
ASX 200 @ Tue 19 Apr 16
Today the index took out the key March pivot high (labelled wave-ic). It also closed above the 200 day simple moving average (orange line) for the first time since August. See the DAILY chart.
The count projecting a 3720 bottom did not play out – the August sell-off had been counted incorrectly as a ‘3’ rather than a ‘5’. Wave-(C) instead traced out an ending diagonal that bottomed at 4706 in February.
If the count shown from that Feb low plays out, look for an A-B-C rally to top around 5800 (red horizontal).
Shanghai Composite @ Fri 5 Feb 16
From July 2015: “The breach of the 4099 fourth wave low confirms the rally topped at 5178 on 18 June 2015.”
See the MONTHLY chart. The index appears to be tracing out a large double three combination downward correction (W)-(X)-(Y) from the October 2007 all-time-high.
The 3-wave count within the current wave-(Y) points to an eventual bottom for this leg around 830, a seemingly implausible 70% below the index’s Feb 5th Chinese new year close (and 84% below its June 2015 peak).
According to Elliott Wave Theory, one more iteration is ultimately possible but not necessary for this pattern to complete, that is, a triple three combination (W)-(X)-(Y)-(X)-(Z) is the limit before a major trend change occurs.
ASX 200 @ Thu 14 Jan 16
From August 12th: “ … the first of wave-(C)’s five waves is likely underway.”
Today’s breach of August’s 4936 wave-1 low by the All Ordinaries confirms the three earlier breaches of this level by the ASX 200. It is likely that wave-2 is complete and wave-3 is underway.
See the MONTHLY chart of the ASX 200. Wave-2 retraced 57% of wave-1 (the All Ords retraced a textbook Fibonacci 62%).
If this count is correct, look for an eventual wave-(C) bottom around 3720 (red horizontal). This level coincides with the long term semi-log uptrend line established by the lows in 2003 and 2009.
ASX 200 @ Wed 12 Aug 15
From July 9th: “ … expect a rally to play out over coming sessions that will retrace at least 50% of the sell-off.”
See the DAILY chart. The rally retraced 56%.
Today’s breach of the July low suggests the first of wave-C’s five waves is likely underway.
Confirmation of the larger count – an enduring top at 5996 on March 3rd – remains a breach of the 5122 wave-4 low (magenta horizontal).
ASX 200 @ Thu 9 July 15
From May 6th: “The count shown from the March 3rd high (5996) projects a bottom for this move around 5380 (green horizontal).”
The DAILY chart counts the 3-wave sell-off from March 3rd complete at today’s 5383 low, 3 points shy of the target.
Confirmation is a breach of the wave-iv high at 5705.
As the wave-4 low at 5122 (magenta horizontal) remains intact, there is as yet no confirmation that the presumed 5-wave rally from August 2011 topped at 5996 on March 3rd. At this stage the sell-off could be just another higher low in that continuing rally.
Either way, expect a rally to play out over coming sessions that will retrace at least 50% of the sell-off.
SHANGHAI Composite @ Wed 1 July 15 – Intraday
Last month’s breach of the 4099 May 8th low (wave-C’s 4th – magenta horizontal) confirms that this rally leg topped at 5178 on June 12th. See the MONTHLY chart.The pattern from the 2008 bottom (1664) counts well as a double-three combination upward correction [W-X-Y].
According to EW Theory, one more iteration is possible but not necessary for this type of pattern to complete (ie. a triple-three combination is the limit [W-X-Y-X-Z].
ASX 200 @ Mon 29 June 15
Today’s breach of the June 10th low confirms the larger pullback underway.
The count shown on the DAILY chart projects an eventual bottom for this move 500 points below today’s close – around 4920 (green horizontal).
Alternatives are possible, but at this stage less likely.
Confirmation of the larger count – an enduring top at 5996 on March 3rd – remains a breach of the 5122 wave-4 low (magenta horizontal).
