XJO 0.09% 5,620.6 s&p/asx 200

halfway stop on the capitulation highway

  1. 315 Posts.
    Firstly I'll take the risk of abuse from starting a new XJO thread, but the day's thread is already getting quite long so I think today there's room for at least 1 more.

    All figures below are XAO (though XJO maybe aligns at the bottom).

    Anyway I've been sitting back waiting for 3260, which is half a channel down from the main channel breach at 3600. This breach IMO brought on the final capitulation phase.

    Now firstly, I've reposted by chart from Wednesday, suggesting a 3260 pitstop halfway down this capitulation phase to 2920 (next week likely). OK, we're more like holding 3230 but perhaps? we might actually close at 3260. Anyway 3230ish is close enough for a halfway overnight (or possibly even a 2 night) stay. My target is 2920 (though an intraday overshoot to as low as 2800 IMO is possible).

    Secondly, below I've posted a new chart which is just an extension calculation of 2936 which corroborates the 2920 target.

    Thirdly, as nicely pointed out by shetoldmetosell on a BHP thread last night, we have the 61.8 fib of the market move from approx 1980 very close to this level. Taking the original index value of 500 and the blowoff top high of 6873 gives a 61.8 fib of 2935. As shetoldmetosell pointed out this is also consistent with the 61.8 fib which stopped the 1987 crash.

    So there you have it. 2920, 2935 and 2936. Take your pick. Again, doesn't mean we stop right there, but that's the day to buy.

    I note BHP at $20 is also halfway to its logical target of $16. Also CBA is still well short of its likely target of $25. This alone suggests/confirms this half a channel bottom will not hold.

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