Commonality - the South African market


@David_F raised a very interesting subject in his post about the ASX 200
I think commonality is very important, which is why I track the South African market. Here is my current take on what is happening there (the ALSI 40):

It is very similar to the analysis David has for the ASX … but a big difference is that it has the 40-week cycle running short at 36 weeks, and that is why we get that 40-week circle-and-whiskers in October. So is it possible that the 40-week trough has come in? Even though the shorter cycles then don’t really make sense …

I also watch an analysis that uses a shorter nominal model (thanks @joestreich). This might make sense for the SA market because of the reliance on Gold and Gold mining … here is the analysis:

This is strikingly similar to John’s analysis of the SPX here.

The great thing about watching other markets is it can give you early warning about when bigger cycles are turning. I hope you find this helpful.

ASX200 Index (EOD)


about “commonality” some “hints” to refine the concept.

a) if you look at the 6 years cycle (I know, I know …:wink: you can check that between 2/3 and 3/4 of the components made their Low end of February 2003 and March 2003 AND end of February 2009 and March 2009

Around 15 % of the components made their Lows in october / november of the previous year (2002 and 2008)

This is confirmed at least for the DOW 30, the DAX 30 and the CAC 40 - 100 big corporations

so according to Jim Tillman work you can use the second group as a warning of the behavior of the first group.

b) you have also a better commonality between Indexes fluctuating within the same “Fractal of Price”

Let’s say between the NASDAQ, the CAC 40, the FTSE, the NASDAQ, the ASX which are now in the 5000 points plus minus

the DAX is intermediary in the 10.000 and above , the NIKKEI and the DOW are more similar near 20 000