Possible Scenarios for Oz Market

I say possible as I am careful to be overly definitive about what the future might hold. We can only sensibly postulate and consider probabilities.

The daily for the XJO is as follows:

It suggests a possible wave four bounce – but this is a side show and is all part of a five-wave momentum downwards. That is a bear market.
The first wave five is 4400 but if we consider the midpoint of the wave five projection i.e.., 4000 and we look at this level in history we see:

There are two periods when the level of 4400 was experienced – some oscillating – in July 2011 and a year later.

I have marked in blue however a period when there was much range trading around the level of 4000. I do believe markets have unconscious memories. I am inclined to think that 4400 is less significant than 4000 which also happens to be a round number. Which markets like.

I am inclined to think also that whilst Elliot displays a wave four bounce this is not going to be significant. It is more intent on the wave five low.

However, we will also review this closer to the time as it is possible, we could see an even lower low in sight then. We cannot see it on the horizon now, but it could well appear. An article is almost out of date by the time you get to read it as the markets have moved on in the meantime.

The tenet that all this could be over quickly is hard to take on. There are so many factors in play, and this is uncharted waters. So, it is one step at a time.

I will surely post when I believe we see a worthwhile change in outlook.

Enjoy the ride

Tom Scollon