First off don't let my bias persuade you, i can and have been wrong in the past, but i base everything i trade from the basis of probabilities.
Being wrong is fine, being wrong and stubborn about it well............
I think you get the picture.
Whilst the 2001-2003 bear market was severe in the US markets it was kinda muted in the XJO, although thats still some pullback in percentage terms, its just the last move from 2003-2007 was freaking HUGE.
I mean seriously what they heck was going to cause a rally of that magnitude?
Getting back to this chart, the last bull cycle took 241 weeks
If we project that from the 2009 lows, we have just past it.
Not exactly the mega bull run that is been seen on the US and some European markets.
Its only testing its 61.8% retracment area from the 2007-2009 crash.
That aside, my main point is that to an Elliottician, that is STILL (at the moment, it may change later) a 3 wave looking move from the 2009 lows.
Thats important as it says, wait for it ....................
A bear market rally, ok ok ok dont all laugh.
Its a bear market rally against the 2007-2009 crash, so technically a bull cycle (you trade it as a bull trend)like the previous move from 2003-2007, which i might add was a true bull market IMO.
But, in the context of this time scale, it is a bear market corrective rally.
Things may change and the markets go crazy to the upside and the XJO goes to 15000 for all i know in 4 years.
But i deal with what we have now, i dont care about 4 years time.
It also could go to, wait for it ......................
3000-2500.
Yes you read that right a re-test of the March 2009 lows and a bit lower.
Again, dont let my bias change your bias, but lets just say the US saw a severe pullback the SPX went from 1750 (approx where it is now) to 1400.
300 points, the XJO can easily see 4000 or if a larger pullback in the US markets, retest the March 2009 lows.
The reason being its not at the equivalent zone as the US markets.
Whilst the SPX has eclipsed the Oct 2007 highs, XJO, CAC and EUROSTOXX 50 are well below those highs, so any sort of substantial reversal in the US markets is going to have a larger effect on the XJO that it would on the US markets.
Simply because the XJO has failed to deliver in terms of price Vs the US markets which are well above their Oct 2007 highs.
Maybe you want to get on the old telephone and ask the RBA to start buying the SPI futures lol, cause it seems any disruption in the markets is going to have a bad effect on the XJO.
The last decline at the May 2013 peak saw the XJO drop from the 5250 area to 4650 (approx) to around 600 points
The SPX dropped around 130 points in the same time frame.
300 points in the SPX is going to suggest the XJO tests 4000-4200
So the bulls need to pray there is not an event like the 2011 move close by.
(20min delay)