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To see the forecast of 4th March 2008 for the XEJ Index (S&P/ASX 200 Energy) click on the following link to the appropriate Blog Archive:
http://donoghuecomputersystems.blogspot.com/2008_03_01_archive.html
The XEJ was then at 14787 and was breaking out downside of a rising six-week wedge. It was stated that if the XEJ began to collapse, it would probably go down to at least 12,150. It has now exceeded that level.
Most important was the following statement made on 4th March 2008: “Already there are technical reasons to suppose that the drop will be much greater than this once - and if - it gets underway.”
But what happened after the appearance of the six-week wedge back in early 2008? The XEJ proceeded to go down to 13,683 on 20th March 2008. And then it began a detour - a terrific rally all the way up to its intra-day high of 20,254 on 3rd June 2008.
Was it time to wear egg on the face? Time to eat humble pie? Not necessarily. Because in Technical Analysis when an important pattern appears, although it may not fulfil its warning immediately, it stands as a red, flashing signal that one must now be especially alert and on guard as trouble may well be lurking in the nearby future.
Obviously, as an analyst I attempt to forecast what probably lies ahead. When the forecast proves to be off the mark I re-examine the situation, looking at it afresh. Hind-sight is a cheeky villain, isn’t it? The XEJ rally that occurred from 25th March to 3rd June 2008 could be referred to possibly as a surprise “last-gasp” rally, or a surprise “blow-off” rally. Off course, dawning my Elliott Wave Theory hat – and with the benefit of hind-sight – that gasp formed a final Elliott wave which was part of the greater Up-move which began on 15th September 2006. Indeed, even that long Up-move was merely a part of the greater Up-move which began on 14th March 2003 at 3547.9.
Good luck to everyone in these historic but most treacherous times.
The XEJ was then at 14787 and was breaking out downside of a rising six-week wedge. It was stated that if the XEJ began to collapse, it would probably go down to at least 12,150. It has now exceeded that level.
Most important was the following statement made on 4th March 2008: “Already there are technical reasons to suppose that the drop will be much greater than this once - and if - it gets underway.”
But what happened after the appearance of the six-week wedge back in early 2008? The XEJ proceeded to go down to 13,683 on 20th March 2008. And then it began a detour - a terrific rally all the way up to its intra-day high of 20,254 on 3rd June 2008.
Was it time to wear egg on the face? Time to eat humble pie? Not necessarily. Because in Technical Analysis when an important pattern appears, although it may not fulfil its warning immediately, it stands as a red, flashing signal that one must now be especially alert and on guard as trouble may well be lurking in the nearby future.
Obviously, as an analyst I attempt to forecast what probably lies ahead. When the forecast proves to be off the mark I re-examine the situation, looking at it afresh. Hind-sight is a cheeky villain, isn’t it? The XEJ rally that occurred from 25th March to 3rd June 2008 could be referred to possibly as a surprise “last-gasp” rally, or a surprise “blow-off” rally. Off course, dawning my Elliott Wave Theory hat – and with the benefit of hind-sight – that gasp formed a final Elliott wave which was part of the greater Up-move which began on 15th September 2006. Indeed, even that long Up-move was merely a part of the greater Up-move which began on 14th March 2003 at 3547.9.
Good luck to everyone in these historic but most treacherous times.
James Leo Donoghue
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