Prediction of an XJO Correction

Prediction of an XJO Correction

Astro-enterology (not its real name, and it has nothing to do with astrology) is an unproven theory.

Loosely summarising the significance of this prediction that is based on astro-enterology, the longer that the train runs without going far from the track then the greater becomes the probability that the train will continue to stay on or near the track.

Displayed below is an old daily chart of the XJO that shows what the chart looked like, as closely as it can be matched to the last time that similar astro-enterological circumstances to today were occurring. The dates and index values have been removed from the old XJO chart because they have no relevance after the match-up has been made. Either the old XJO chart is matched up to the present-day chart correctly, or it is not.

The chart match-up begins at the end of March, so three months worth of the match-up have already elapsed. To understand this better, compare the first three months of the old chart with the chart for the most recent three months of the XJO. The pattern is similar enough to justify the match-up.

History repeats itself, but not exactly, so some deviations from the pattern of the old XJO chart are to be expected. Deviations may be substantial, so if the train leaves the track then the derailment cannot be confirmed until several days or weeks after the derailment.

Prediction: If this match-up is exactly right (and of course being exactly right would be impossible) then a correction is on the cards to begin in about six weeks from now. The XJO will then take about five months to fall about 20% before it stops falling, and there will be several substantial counter-rallies along the way.

Astro-enterology theory allows that the big picture can be severely distorted by unpredictable market-sensitive events such as natural disasters and incompetent decision-making by world leaders. (I'm just mentioning this so that I can blame the orange joker when this prediction gets shredded by reality.) Also, there is some elasticity in the timelines of the theory. This means that the predicted correction could begin several weeks either side of the predicted six weeks from now, and it also means that the magnitude of the correction could be substantially different from the predicted 20%.

Maybe sticking my neck out here with this prediction of a correction, but I don't mind if this derails after just a few days. It's just a bit of speculative fun. The aim is to make an assessment in six months from now of what percentage of the prediction turns out to have been correct. If the result is substantially greater than 50% then the experiment will have been worthwhile. The theory has been approximately right in the past, but past tests have only been performed with the benefit of hindsight. Here the theory is put to a live test. I thought it might be interesting for others to see it and they can comment on it as it progresses. Also, it would be interesting if other posters post alternative six-month XJO predictions based on their own theories.


Old XJO daily chart - a template for the prediction


Current XJO daily chart - three months up until today



Caution: This post is entirely speculative. Nothing in this post should be used as a guide when making investment decisions.