The Ides of March

     On his way to the Theatre of Pompey (where he would later be assassinated), Julius Caesar saw a seer who had previously foretold that harm would come to him not later than the Ides of March (15 March by the Roman calendar). Caesar joked, "Well, the Ides of March have come", to which the seer replied "Ay, they have come, but they are not gone."
     To my mind the XAO Indicator is a little like the seer. It foretold of the danger ahead. Investors that failed to heed the warning would have been "assassinated" in the past couple of days and I can't help feeling that the final words of the seer may also be relevant in this market: "Ay, the Ides have come, but they are not gone."
     In plain English, what I am saying is this. It is tempting on these panic days to go "bargain hunting" (and I must admit to doing that a bit today - but only a bit) but the wise course would be to assume that the worst is not yet over. Often these panics move in a basic Elliott Wave pattern. If that is right we might only be 50-60% of the way down from the February high. That would mean testing the 2010 lows of around 4200 on the All Ords.
    In any event "crystal ball gazing" is not really necessary - and probably dangerous. If we patiently wait for the XAO Indicator to turn blue again, in my experience there will be ample time to jump on board the next rally. This way you will avoid the heartache of getting in too early and regretting it later.
   Below is today's chart. I have also drawn in the Fibonacci retracement levels from the May 2010 low to the Feb 2011 high. What's interesting is that yesterday the market closed right on the 38.2% retracement level and today it closed right on the 50% retracement level. It looks like it is searching for support but will it find it? The next common support level is the 61.8% level at 4516. Will it close there tomorrow and make it three out of three?