|
|
Business >>
Investment
>>
Oz Stock Trading Reports >>
|
Oz Stock Trading ReportA six-month forecast scenario for the All Ordinaries Index Nov 23, 2011
Nov 23, 2011 © Harry P. Schlanger
The All Ordinaries Index may be completing a digonal, terminal wave that is due to bottom in May next year. Then the bull market should resume its upward run.
A forecast model using Elliott Wave analysis of the All Ordinaries Index (XAO) shows the possibility of a market bottom in May next year.
The market is completing a five-wave movement down to 3400 on May 25, 2011 (plus or minus three days). The proviso for the model to remain valid is for the XAO
not to breach the current top trendline.
Time Analysis for the XAO
The current weekly scenario of Fig 1. recognises that the market is making a three-wave A-B-C correction that started since the top of 2008.
Latest price activity can be thought of as the C wave in progress, which may have the same duration as the A wave of 2008.
This would mean that all three corrective waves have forecast times that are in corresponding ratios 1.0 : 1.618 : 1.0, where 1.618 is known as the golden ratio.
Elliott Wave Speculation of Terminal Wave C
Based on Elliott Wave theory, it is speculated that the C wave will be diagonal (Fig. 2), consisting of five legs, each of which will have three subwaves.
The third subwave is currently in progress and may drop over 1000 points to bottom by mid February 2012.
This is because the weekly chart indicates a meeting of the long-term bottom trendline with an important fan line (as indicated in Figure 1),
providing strong support in that price/time frame.
Then the market may rise back up to its top trendline for the fourth subwave, which technically should overlap with the first subwave.
The fifth and final subwave of the diagonal triangle may see prices drop into the May 2012 time frame for a market bottom.
Weekly and Daily Charts of the XAO
|
Fig. 1 Elliott Wave Analysis of All Ordinaries Index, Weekly Chart: Nov 23, 2011
(click image to enlarge)
|
|
Fig. 2 Elliott Wave Analysis of All Ordinaries Index, Daily Chart: Nov 23, 2011
(click image to enlarge)
|
Trading Stocks from the All Ordinaries
For educational purposes only: As a 1000 point drop is forecast, shorting the market would seem a more appropriate strategy for the short term
Alternatively, the investor may wait until the market has bottomed in the region of 3400 before committing funds.
References:
-
Introducing the Elliott Wave Principle: How Ralph Elliott's Stock Market Cycle Theory Came About
-
Basic Tenets of the Elliott Wave Principle: Understanding Market Waves and Learning the Rules of Construction
The copyright of the article Oz Stock Trading Report: A six-month forecast scenario for the All Ordinaries Index Nov 23, 2011 is owned by Harry P. Schlanger. Permission to republish in print or online must be granted by the author in writing.
|
|
Custom Search
Other Articles:
Website Construction:
Gum Leaf Designs © 2011
|
