Predictions for a Top in the S&P ASX 200

Discussion in 'Sharemarket News & Market Analysis' started by kitdoctor, 22nd Jan, 2019.

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  1. kitdoctor

    kitdoctor Well-Known Member

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    I’ve prepared an Elliott wave count for the S&P / ASX 200. One of the problems with labelling waves in the S&P ASX 200 is that it is very choppy. It reminds me of the period in the late 1990s where again the index was very choppy. I apologise for the charts as some wave labels overlap one another. I use the free version of tradingview and I don't know if you can lock text in its position.

    There are alternative wave counts (see below) , however, this (in the attached charts) is the most bearish. As I see it the index has formed an ending diagonal in the primary wave C (circle) position. This means the subordinate intermediate waves that make up primary wave C (circle) are being constrained within an upper trendline drawn through points intermediate wave (1)’s end and (3) and a lower trend line drawn through points intermediate wave (2)’s end and (4). In this scenario the index may either just exceed or just fail to meet its November 2007 high. In all cases ending diagonals occur in terminations points of larger patterns. As the primary and cycle degree trends have been up, the peak in 2020 would be followed by a reversal to the downside.

    I have made three forecasts. The first is for a top in 2020 6596.5 (August). The second and third are 6841.4 and 6968.8. The first is achieved by transposing the slope of various diagonals in the ending diagonal (see chart). The slope of a line drawn between points (C) B (circle) and (1) is almost the same as that drawn between (2) and (3). Using this slope a line can be drawn through (4) to predict where (5) will finish. The two other predictions are performed by applying Fibonacci ratios (see attached). A number of forecasts using Fibonacci ratios have already proved quite accurate (again see attached).

    One line of thinking supporting the bearish prediction is there’s plenty of evidence that points to social mood being very negative over an extended period of time in Australia despite the overall uptrend in the stock market since 2009. This evidence points to being supercyle wave (IV) i.e. a corrective fourth wave of the stock market at high wave degree where deep negative social mood pervades. A pervasive negative social mood leads to conflict, isolation, retaliation, disagreement etc. Examples supporting this include:
    The alternative wave count is shown as “Alt” line on the attached chart. The semi-bullish forecast is that it was minor wave 2 of intermediate wave (3) of primary wave 3 (circle) that finished on 24 December 2018, rather than intermediate wave (4) of primary wave C (circle) of cycle wave b that finished on 24 December 2018.

    Two predictions have been made for where the market could bottom after the reversal (891.9 and 1032.0). I realise just how ominous these are.
     
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  2. radson

    radson Well-Known Member

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    huh?
     
  3. kitdoctor

    kitdoctor Well-Known Member

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    Society's tolerance for gay, lesbian, transgender etc. persons rises in periods of significant negative social mood (e.g. same sex marriage legislation is passed in periods of significant negative mood). This is because society's attention is drawn to dealing with bigger problems - i.e. at the individual level basic survival e.g. having a job, putting food on the table.
     
  4. Nodrog

    Nodrog Well-Known Member

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  5. willair

    willair Well-Known Member Premium Member

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    Quote ..

    One line of thinking supporting the bearish prediction is there’s plenty of evidence that points to social mood being very negative over an extended period of time in Australia despite the overall uptrend in the stock market since 2009. This evidence points to being supercyle wave (IV) i.e. a corrective fourth wave of the stock market at high wave degree where deep negative social mood pervades. A pervasive negative social mood leads to conflict, isolation, retaliation, disagreement etc. Examples supporting this include:

    A lot of work has gone into your excellent post but I just have to ask are you trading on those charts,and massive amounts of data and is it a success,..
    Blackwell Global - ECN Forex CFD Trading - Official Everton FC Partner
    The Wolfe Wave Pattern - Blackwell Global
    It's a interesting read inside this site//wolfe wave pattern..
     
    Last edited: 22nd Jan, 2019
  6. kitdoctor

    kitdoctor Well-Known Member

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    I don't trade day-to-day in equities ETFs etc. We never did because essentially your superannuation includes Australian and international shares. We focused on residential investment properties. Own nine IPs, PPOR and I alone have a six figure annual passive income from superannuation. Retired at 53 last year in May.

    I've used the chart of the S&P ASX 200 and other US/European indexes to time moving my (plus wife's plus all working relatives we have, plus work colleges who will listen) superannuation into a cash option to protect capital. I'm using this information to understand what the big picture could look like. I also look to some commentators like Martin Armstrong and Phillip Anderson for additional information.

    Plus I maintain individual charts of median prices/sales of suburbs where we have IPs to time the residential property market.

    I am making some big calls here with the S&P ASX 200. Believe me I want to be wrong on the Target 1 2020 6596.5 (August) top but I'd rather have some form of plan of what the future could look like that I've thought through that is based upon data analysis. Very little economic commentary in the media is of any value. If you want to watch a comedy channel watch Your Money channel 95. Non-stop laughs 24 hours a day.
     
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  7. kitdoctor

    kitdoctor Well-Known Member

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    Wolfe wave pattern looks like it is based upon a (poor) understanding of the Elliott Wave Principle pioneered by RN Elliott.

    Phillip Anderson bases his equity market predictions on the work of W D Gann. The table below was not developed by Phillip Anderson. Gann Financial Table Part 2 090712 GFT - extended and adjusted.GIF
     
  8. willair

    willair Well-Known Member Premium Member

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    I agree about the ##### channel I find it better to just look at the numbers and play music ..



    I have a few books on what you talk about ,but's it's above me once I read Nassim Nicholas Taleb book
    ""The Black Swan "" that opened a different door ..
    Quote ..
    To be completely cured of newspapers,spend a year reading the previous week's newspaper..

    And 6596.5 mid year is on the cards once understands prophecy and forecast are the same in the big picture..
     
  9. kitdoctor

    kitdoctor Well-Known Member

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    I realised that the end of cycle wave a (March 2009) had been cut off my charts. XJO Terminatinon Prediction No 7.png
     
  10. Redwing

    Redwing Well-Known Member

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    That would be interesting to see how that works also

    You dont think the US will bring us down before that?

    The US is still at nosebleed levels, stocks are expensive compared to their corporate earnings.
     
  11. Zenith Chaos

    Zenith Chaos Well-Known Member

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    Very interesting thread, thanks for your efforts putting it out there for us to read.

    If one could approximate the future high as you have done, wouldn't it make sense to reduce risk by moving into low risk assets a little earlier than the predicted date? What about a gradual transition into low risk assets? If I stick to my principles and assumptions I won't sell but will buy as close to the bottom as possible, so if you know when that will be, please post it :p. I'm currently creating a war chest of cash rather than buying into equities, which is my way of timing the market. I have been advised by some knowledgeable people that the US is very expensive at the moment.

    Are the relationships between negative sentiment and royal commissions / gender based on intuitions or statistically significant relationships drawn from data?

    Thanks again.
     
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  12. SatayKing

    SatayKing Well-Known Member

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    Will await the response and read with interest.

    In the meantime:

    [​IMG]
     
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  13. sharon

    sharon Well-Known Member

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    @kitdoctor - thank you for sharing your thoughts and your charts. I don't understand much about it at all but love to read it. Between you and @Alex Straker - I feel like I am getting an education!!
     
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  14. Ross36

    Ross36 Well-Known Member

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    Hi Kitdoctor. I may be misinterpreting this - but are you saying you are accessing a passive income stream from super before you reach preservation age? How are you doing this?
     
  15. kitdoctor

    kitdoctor Well-Known Member

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    Yes. Technically I'm on holidays from May 2018 to September 2019. The Commonwealth Superannuation Scheme allows you to retire before your preservation age. I'm taking advantage of an option called "54/11" where you resign no later than two days before you turn 55 and defer your superannuation benefit to a couple of days after you turn 55. This means you are not actually taking "age retirement" but a "deferred benefit". This in turn means they calculate your annual benefit differently. Most often and in my case to the upside.
     
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  16. kitdoctor

    kitdoctor Well-Known Member

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    It is possible to forecast the general nature and scale of events that will occur in the future. The specific nature and timing of these events is largely not predictable.

    Let me give you some examples.

    Example 1: Over in another part of the forum I made a forecast that Australia's cricket team will continue to perform poorly. A member here on the forum said "...what a load of crap" and said my forecast was not specific so it was not valid. Australian went on to lose the test series and One Day Series against India which is consistent with a general forecast.

    Example 2: Early in 2011 it was possible to make a call that social mood in Russia was turning negative at a large Elliott wave trend degree. This would mean that it would make sense that the Russian government would commence a campaign of antagonizing other countries, etc. etc. etc. The chart below shows what happened. RTS Index 2009 - 2018 and Russian Negation Social Mood and Actions.png
     
  17. kitdoctor

    kitdoctor Well-Known Member

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  18. Nodrog

    Nodrog Well-Known Member

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    Well done.

    I received my PSS defined benefit pension at 41 albeit only a small one due to taking a voluntary redudancy. My wife could have commenced her deferred small PSS defined benefits pension now at 55 bud we chose to wait till next Financial year when she turns 56 as it would have been a negative for CGT planning and impacted SMSF strategy for this FY.
     
  19. kitdoctor

    kitdoctor Well-Known Member

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    Here's a chart for units (apartments, townhouses etc.) in the city of Monash. I had to cut the RHS of the chart off because it contains three forecasts for future median prices and sales volume made by the company that provide the raw data. I have applied my own Elliott wave labels to the median price data showing that the trend has been wave (1) up, wave (2) down, wave (3) up and now wave (4) down. Wave (5) up should be to new highs. There is more to this statement but I'll explain that in another post.

    Can you see the sales spike mid-way in wave (3). This is a recurring signal that often occurs about half way in wave (3) signalling the wave is about half way through its upswing. See how sales then drop off relative to this peak but prices keep rising. This is the complete opposite of that old real estate industry saying "prices follow sales". In this case there is one more significant sales peak that occurred toward the end of wave (3). Sometimes you see a very early sales peak at the start of wave (3).

    You can take many, many suburbs or even better Local Government Areas (the bigger the data set the better) and the charts are very similar. Wave (3) has finished and wave (4) is underway or wave (3) is topping or may run a bit further yet. Monash Units Median Price and Sales.JPG
     
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  20. kitdoctor

    kitdoctor Well-Known Member

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    The Elliott Wave Principle requires that you consider and analyse all markets independently. Market commentators like to draw conclusions, for example, that (A) the DJIA was down 300 points overnight and (B) the S&P ASX 200 is down 30 points today and (A) caused (B). Others include:

    "Interest rates drive stock prices."
    "Rising oil prices are bearish for stocks."
    "Falling oil prices are bearish for stocks."
    "Falling oil prices are good for stocks."
    "An expanding trade deficit is bad for the economy and therefore bearish for stocks."
    "Corporate earnings drive stock prices."
    "Jobs drive stock prices."
    "GDP drives stock prices."
    "Wars are bullish/bearish for stock prices."
    "Peace is bullish for stock prices."
    "Quantitative easing (QE) makes financial markets rise."
    "Targeted central-bank buying and selling moves markets."
    "Authorities can boost the stock market and prevent recessions and depressions."

    All of this is complete rubbish. News, external events, earnings, interest rates, etc. etc. do not have an effect on a market's trend.

    We can continue to hold onto these beliefs and hence be buffeted around like a cork floating in the ocean or we can think differently and have the Elliott Wave Principle guiding us like a compass.
     
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