# XAO top identifier



## Synergy (16 September 2010)

This is something i was looking at a while ago but didn't ever think too much of it. I started looking at it again last night, and think it might be worth a bit more time. All i have is the XAO plotted against the buy signals my system produces and the 8 day average of those signals. 

I don't know if i've been staring at it for too long, but it looks like the periods of extreme buy signals coincide with the XAO peaks with pretty high accuracy.

The system is a long only system, so I'd expect more signals in a rising market, but it's the days or small groups of days with extreme signals compared to the days either side that i'm interested in. They occur just before the market turns.

Does anyone think it's got any merit? It's not something i've worked on, just something i've observed. I've circled the main areas of interest, although many smaller XAO peaks also line up with increased buy signals.


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## tech/a (18 September 2010)

Synergy

I dont know what your system is but it appears to identify unloading of stock rather than accumulating.Its pretty common to see an increase in volume and range which leads to higher volatility at these times.
Many mistake this as strength.

A contrarian indicator.


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## Synergy (18 September 2010)

tech/a said:


> I dont know what your system is but it appears to identify unloading of stock rather than accumulating.




Hi Tech,

That would be the logical thought, but it's a breakout system of sub 50c stocks, which is the surprising thing, and the scary thing for me. A lot of false breakouts there in short spaces of time.


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## professor_frink (18 September 2010)

Synergy said:


> This is something i was looking at a while ago but didn't ever think too much of it. I started looking at it again last night, and think it might be worth a bit more time. All i have is the XAO plotted against the buy signals my system produces and the 8 day average of those signals.
> 
> I don't know if i've been staring at it for too long, but it looks like the periods of extreme buy signals coincide with the XAO peaks with pretty high accuracy.
> 
> ...




Hi Synergy,

You say it's a breakout system, is it something along the lines of a cross of a HHV by any chance?

Looks fairly similar to a market breadth plot of new highs FWIW


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## nulla nulla (18 September 2010)

Certainly worth following to see how it continues to compare.


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