I thought I’d update my Macquarie MQG chart as it’s at an interesting point. I’ve said before that this chart tracks closely the overall market, just it can be analysed more clearly sometimes than the XJO. I’ve also put up the equivalent Dow Jones chart though to show its in the same position.
Firstly, the MQG monthly chart below is just a repost of my April and August posts of the bigger picture monthly chart showing how the stock is tracking the downtrend so far. It has wide swings but nevertheless is trending down.
View attachment 104376
The weekly MQG chart below showing the current details is actually more interesting. I’ve mentioned a few times here and XSO forum my view that we are in a Counter-Trend since the August market drop and will have another leg down.
Counter-trends are typically 3weeks (+/- 1 wk) in length before failing or otherwise 9 weeks (+/- 2 wks) in length before failing.
You can see the sharp initial move down from the high to the 25% level, exactly spot on. This is so typical of a three-leg zig-zag fall it gives me confidence I’m on the right track.
We then got a weekly Counter-Trend starting which ran up to a peak at three weeks (picked up a quick 3 bagger on this move). When it broke down in week 4 I went short. But the price fall didn’t follow through and I partly covered at the end of the week with a sold put. It appears it has actually been the longer Counter-Trend playing out.
We’re now in Week 7 of the Counter-Trend (CT) and the start of the danger zone again. My price target for the Wave B retracement level is the 78.6% level at $82.60 up to $83.40. It spiked up just below there on Monday so it could have been the peak of this move. But when a 9 week CT fails 2 weeks early, it shows the stock is quite weak and has a longer way to fall. I’ve felt instead we need another week or two still to complete the move. I don’t think it will go on longer than 9 weeks, but you have to let the market do what it will do.
If we get to twelve (12) weeks without a substantial fall, then my assumptions I’ve been trading since April are invalid and we’re likely in a new uptrend. I don’t think we’ll get that far though.
Note that MQG is also in a capital raising phase at the moment with an SPP completing end of October, so I think that's another reason the stock might hold up a bit more.
View attachment 104377
Dow Jones DJI Weekly Chart.
Just to show how I think of MQG as a proxy for the overall market, you can see the DJIA is in almost exactly the same position. An initial sharp 25% fall. A three week counter-trend that failed slightly in week 4, and recovered and continued.
But you can also see more clearly on the DJI the bear flag continuation pattern forming. It needs one more red bar for me to confirm, but looking at the moment as another big leg down is shortly due.
View attachment 104378
(20min delay)
