World Indices Roundup 2019

How long have you been waiting since the last one?

 

I never pin all my hopes on a single buying strategy. From memory around last December was when I was more aggressively buying.

As a retiree protecting our wealth is of greater importance nowadays. Tsunami jokes aside ASX is of much less interest to us at this time as we have substantial exposure. Though International is. However we’ll buy more aggressively when the risk / reward suits our own personal circumstances and stage of life.

 

@Barny the short answer is no. When you practice the Elliott wave principle you must accept that exogeneous forces such as events and their reporting as news have no bearing on the price movements of financial assets. For thirty years I believed the complete opposite but after reading seven consecutive books on socionomics and market behaviour I finally saw the light.

As humans we like to believe we can explain the daily price movements in equity indexes, commodities, interest rates etc. but all economic commentators and market observers do is fit the days's events/news to suit the movements that occur.

The only events/news I pay any attention to are those that might mark extremes in sentiment because these may confirm a turning point in an established trend has occurred or indicate one is soon approaching.

 

@Barny I thought I'd post again to avoid any confusion. I am very short-term bullish on the ASX 200 (meaning into late May and extending into June) but once this fifth wave finishes there will be a reversal and it will be nasty as it must reclaim some of the gains made since 24 December 2018.

If you have followed my longer term prediction one of my targets for the end of the bear market rally we've been in since 2009 is for that to end in August 2020. If this happens, then the tsunami crash may well be underway. Am I absolutely confident with this prediction? No. Counting waves in the ASX 200 is incredibly hard (so there are alternative wave counts). Also, I'm a follower of Phillip Anderson's 18.6-year real estate cycle and this places us in the mid-cycle slowdown, ahead of a top some time in 2024-2026. Indeed APRA's announcement last night dumping the 7% interest rate assessment criteria is right on cue.

 

Excellent response, thanks. You aren’t the only one predicting the reversal around June which is interesting to see what will happen.

 

Okay the sharp correction we are experiencing now in XJO is either over or will soon end. Then one last push upwards and we're in for a more serious correction but not my forecast tsunami which is still some time away.

 

Really enjoy your posts @kitdoctor. Do you have a corresponding chart?

 

From my casual observation over many years, it appears there needs to be some sort of political or economic event to spark a major share market down ward spiral?
For example recently with the US trade negotiations with China there appears to be uncertainty in the market, if that worsens will that cause the tsunami?
Same with the Brexit, there were a couple of hiccups in the market a while back.
Then there was the European financial bail outs with Greece, Spain, etc all that seems to be bit to quiet at the moment.
I understand that the markets are quite high and a correction is not far away as has been stated, I understand that, but it appears there needs to be a trigger event for this market correction to take place?

 

I’ve been practicing getting ready for the market tsunami but still got a way to go. That’s me on the left:

 

A couple of things I've read about that are:
- potentially concerning are US corporate debt, large enough for Powell to make an "be alert but not alarmed" type statement somewhat reminiscent of Bernanke in 2008 just before the sub-prime crash. But more measured than Bernanke's statement.
- Deutsche Bank going through some very bad times. Not sure if this is enough to trigger anything major like Lehman, but who knows.

 

What a load of Bull.

 

Here is a daily chart showing the price action in XJO from the high on 30 August 2018 to the low of 24 December 2018 and the rally since with a possible Elliott wave count. Also attached is a long-term weekly chart.

The rally has subdivided into five waves ((i)) - ((ii)) - ((iii)) - ((iv)) - ((v)) (in red with wave ((v)) incomplete). Wave ((iii)) also subdivided, shown as (i) - (ii) - (iii) - (iv) - (v) (in pink). Wave ((v)) is also subdividing. Assuming my wave count is correct, we are in wave (v) of ((v)) of A. Once complete, a five wave move must be followed by a three wave correction.

I am watching with interest XJO's break through the upper pink trend line. Minor excursions above it, as has already occurred with wave (iii) (pink) and what is likely to occur with wave (v) (pink) do not necessarily negate it. Wave (v) (pink) may truncate and not go much higher than wave (iii) (pink). If XJO just sails through the trend line and does not correct in the way I envisage, then this could well negate my long-term bearish forecast for a major high next year as shown in the long-term chart. Note I am not showing any alternative wave count/s, just my bearish forecast.

 

Interesting article on the inverted yield curve.
The RBA lowering interest rates to such a low level doesn't leave much in the tank when the economy really does go pear shape.

What does the inverted yield curve tell us?

 

Your “Wave C finishes off the chart” annotation, is that in time or price?

 

Would this period mark an extreme sentimate change as the markets on fire?

 

This is very nice count work @kitdoctor! I believe we are entering a heavier sell zone as we speak. Many signs have been building up from both fundamental and technical perspectives. So many smart people have the dial set to maximum caution right now, it just feels like everyone is waiting for the catalyst to bring on the Tsunami, hope it's a decent one for Noddy's sake

The balance of forces in the market are very close to 'squaring', this monthly XJO chart shows all you need to know about why one of the major cycles says we are close to a high.....

XJO


No advice

 

He he. I somehow ended up in this cohort by accident. You can spot me easily as I have the word “dumb” stamped on my forehead.

As a retiree in the earlier stages of retirement I’m certainly exercising caution. This is the peak SORR zone. The actual timing of any major correction doesn’t concern me but until it does our additional cash is staying put.