XAO Technical Analysis

Re: XAO Analysis

Nyden said:

Hmm, I don't think that's correct. A lot of people still believe this to be a correction.

Well, fortunately we're at the beginning of the year, a whole 12 months left to perhaps recover Or do a lot more damage!

I think the general consensus is that no one really knows where our bottom is. No one knows if the US will be able to lift spirits, there's just a lot of theory out there, but very little fact.

Click to expand...

A lot of theory and little fact. You have to be joking or are we on different planets.

Fact is the US have overspent for the last 15years, are now in massive debt and the party is over. Poor old humpty dumpty.

Re: XAO Analysis

The market has pretty much been obeying Newtons law since the start of November... the only thing that has changed is that the investors pain threshold is coming into view... I thunk..

I'm missing terms like..
It's not a loss until you sell..
Bought more because they are cheaper.(as opposed to buying more because it is performing the way I planned)..
It's different this time..

Cheers
..........Kauri

Re: XAO Analysis

explod said:

A lot of theory and little fact. You have to be joking or are we on different planets.

Fact is the US have overspent for the last 15years, are now in massive debt and the party is over. Poor old humpty dumpty.

Click to expand...

Heh, I've been misunderstood.

In reference to the theory/fact argument - I of course mean as to which direction the markets are heading. Of course it's fact that it's a big mess, but I refer to theory as in the theory of interest rate cuts, the theory of a continuing commodity demand from Asia, & the theory of many other factors; negative or positive. Basically, anything of the future. All of which is conjecture.

Which is why no one can truly say what is going to happen for the remainder of the year.

Re: XAO Analysis

mayk said:

Market especially in US is acting quite stupid. Intel gave a 51% increase in profit and its stock price was hammered. What else do you except 100%? In normal scenario it would have lifted the stock price a bit higher.. We are living in crazy times.

Because of the current market sentiment I donot think we will see a bull in the first quater of this year, after intel smashing I don't think anyone else will be spared unless like IBM it exceeds -some god forsaken expectation.

I have decided to convert all my holdings into cash ( I am a fool for not doing it earlier ), and wait for this mad-rush-to-bottom to finish and then will start shopping around for the best oranges in the market.

Now nothing matters it seems majority of the banks and financial institutions want a recession so that they can be rescued by US government and Fed. I think major players are manipulating the US stock market and 'engineering' a crash.

Click to expand...

You may want to ask yourself, who is the stupid one? Intel got smacked because they missed earnings expectations for the fourth quarter and they also guided lower than the market was expecting for the first quarter of 2008.

IBM rallied because they beat expectations significantly. Do you see how that works? Considering that the market is basically down on its hands and knees pleading for rate cuts the conspiracy theory doesn't hold much water.

Once again it seems someone is spitting the dummy because reality didn't do what they wanted it to.

Re: XAO Analysis

kennas said:

28 Nov

WP, Have you officially revised this view as the time cycles for the 7100 high seems a little off.

You picked a 'low' around 20 ish Nov which ended up being a bounce up to what looked to be almost a double top to me with a target of about 6000 ish, and then the current more significant move down started about 10 Dec. Since then it's been down, down, down. Not the significant rally you had anticipated from as early as last October.

Any revised time and price projections?

Apologies if you have already done this in the thread somewhere. Ignore this if you have.

Click to expand...

Hello kennas, sorry for the late reply as not much time at present.

The scenario I put forward has obviously not materialized, the break of the Dec low invalidated it. There was never any doubt these declines would come but I expected then to come after a another rally(but not necessarily to new highs) ending in Feb but it came early instead. This happens sometimes in ED patterns and it would have been easier to pick with that last leg up though!!

This is a strong third wave down and is yet to finish.

I expected this bull trend to end early last year but it extended. Look at the chart attached below(SP500). These are cycle points or points in time that repeat within a chosen cycle. These are a TIME study only NOT price magnitude. Point 16(purple) is the one that is of interest. Cast your eye back to the left of the chart in 1987 you will also notice another point 16. It is just to the left of the vertical red line. Twenty years later I have again plotted that line(1 super long term cycle) and I would have expected to once again reach a peak at that cycle point 16 just to the left of that red line. The problem here is that I am talking about an accuracy of 5-8 bars and on this chart each bar is 1 month and that when it becomes difficult to pinpoint accurately, suffice to say the warning signs are there because it was due mid last year.

You will also notice that from one purple cycle to another point there other green coloured numbers. The most you can have is 3 of these between each successive purple cycle point and the last one comes either on time or EARLY.

Now look at the next chart. I have zoomed in here and viewing the next time cycle down(4 year cycle). The last green cycle point 3 is expected just to right of vertical blue line. That is where I expected it to finish. In this time frame the distance between the same coloured vertical lines is 4 years(1 cycle). The last time the blue vertical line occured was early 2004. The green 3 is just to the right of this line.

On this occasion it came early and this does not happen often. As mentioned earlier you cannot have more than 3 green cycle points in between 2 successive purple cycle points. The last green cycle point within that series will come ON TIME OR EARLY. Well on this time it came early(in October). At the time I was not sure then if we needed another leg up to coincide with green number 3 due in Feb/March which could well now end up being a low.

Presently working to try and improve the accuracy, although this pretty good especially in the smaller cycle timeframes(ie daily charts). These cycle points coincide nicely with completed EW waves. Once a long term cycle point is known then one approximately knows when the next one will occur. One can then estimate potential points in time in forward timeframes from years before. When multiple cycles of different degrees of trend culminate in the same aproximate rime zone then large moves can be anticipated.




Hope this helps

Cheers

Re: XAO Analysis

Real1ty said:

Grace.

Hopefuly this will help

What do you think it would take to turn around the market and give investors some positive sentiment?

Click to expand...

What turned it around in 1987?

Re: XAO Analysis

wavepicker said:

Hello kennas, sorry for the late reply as not much time at present.

The scenario I put forward has obviously not materialized, the break of the Dec low invalidated it. There was never any doubt these declines would come but I expected then to come after a another rally(but not necessarily to new highs) ending in Feb but it came early instead. This happens sometimes in ED patterns and it would have been easier to pick with that last leg up though!!

This is a strong third wave down and is yet to finish.



Cheers

Click to expand...

That is very scarey....Thanks for posting that chart. I had a bad feeling about all of this so I staterd selling off all my stocks last week. I have lost a lot of money this last month but I just got tired of watching it disappear.

I am sure there will be a slight recovery but where to? I am a long term investor and normally this sort of drop wouldn't bother me. How long it would take to recover from a crash is anyone's guess and I can't wait for 3 or 4 years to get my money back. MQG's price drop was a worry today.

I'll come back when its not so nerve racking....

Re: XAO Analysis

CamKawa said:

What turned it around in 1987?

Click to expand...

Time, around about a decade

Re: XAO Analysis

cordelia said:

That is very scarey....Thanks for posting that chart. I had a bad feeling about all of this so I staterd selling off all my stocks last week. I have lost a lot of money this last month but I just got tired of watching it disappear.

Click to expand...

I understand your pain, I went through it back 2000 during the dotcom crash promised myself never to be caught in that situation again.

Have spent years since trying to gain as much knowlege as I can since about markets and be better prepared next time.

Cheers

Re: XAO Analysis

Nyden said:

Heh, I've been misunderstood.

In reference to the theory/fact argument - I of course mean as to which direction the markets are heading. Of course it's fact that it's a big mess, but I refer to theory as in the theory of interest rate cuts, the theory of a continuing commodity demand from Asia, & the theory of many other factors; negative or positive. Basically, anything of the future. All of which is conjecture.

Which is why no one can truly say what is going to happen for the remainder of the year.

Click to expand...

Happier with this input except that I'd bet my sox that we will not have a stockmarket uptick this year like 07. In fact my hairdresser would probably correctly predict a down year. When he does it will be time to buy the good ones again.

But like all, not happy with the current turn of events though.

Even stopped out of my blue chip goldies today

Re: XAO Analysis

Nyden said:

Heh, I've been misunderstood.

In reference to the theory/fact argument - I of course mean as to which direction the markets are heading. Of course it's fact that it's a big mess, but I refer to theory as in the theory of interest rate cuts, the theory of a continuing commodity demand from Asia, & the theory of many other factors; negative or positive. Basically, anything of the future. All of which is conjecture.

Which is why no one can truly say what is going to happen for the remainder of the year.

Click to expand...

Happier with this input except that I'd bet my sox that we will not have a stockmarket uptick this year like 07. In fact my hairdresser would probably correctly predict a down year. When he does it will be time to buy the good ones again.

But like all, not happy with the current turn of events though.

Even stopped out of my blue chip goldies today

Re: XAO Analysis

numbercruncher said:

Time, around about a decade

Click to expand...

Yes, yet I would be quite confident (even without having the precise data needed to backtest) that there was still plenty of bullmarket-esque, periods during the ensuing 10 years. Good if you turned on a LTTF system after the '87 collapse, or your LTTF got you out without too drastic a drawdown.

Re: XAO Analysis

Looking at the standard deviation channel for the last 28 years (yellow) we potentially have room for a decent correction. Even though we seem to have broken down from the current Bull trend, I'm still thinking we've had a bit of over-kill for the moment and are due for a bit of a bounce.

Just out of interest, can someone post a standard deviation channel chart from further back.

Re: XAO Analysis

Lets all draw on the same graph... Just wanted to put it into perspective...

Re: XAO Analysis

The head and shoulders on the XJO has come pretty close to hitting the minimum expected target to-day. I notice a lot of times these targets can be accurate and a lot of times they are not. I also posted the head and shoulders top in 1987 to show you what I mean. Still more to come yet I'd say, I was waiting for a flag or even some rest time by now but looking back at the top of some bull runs this sought of behavior can be seen. Cheers.

Re: XAO Analysis

I try not too forget the fundamentals of why I invested.
AUS companies on a whole in pretty good shape.
AUS has things the rest of the world wants Iron Ore, Coal, Gas, Uranium, being the main ones IMO.
Short term pain long term gain I never seem too be able too pick the bottom and am down on a few investment BHP being the most suprising one. That being said I have no doubts it will recover and make me a profit in a near term time frame as will alot of other stocks on the xao.
Technical CORRECTION Fundamental BULL is my point of view.

Re: XAO Analysis

Synergy said:

Lets all draw on the same graph... Just wanted to put it into perspective...

Click to expand...

so very roughly 1300% pa since '82, so mean growth gives a correction target of 4000??

Re: XAO Analysis

“If winter is here, can spring be far behind?”
Percy B. Shelley

And THAT is the question

Not how long it takes to make new highs
But how long before something starts going up...


At the Winter solstice... Rituals were needed to remind those who had forsaken all hope that... EVERYTHING is cycles and that good times would return..

Minds think in straight lines.. when nature is all curves..

Identifying bottoms IS important ( not picking, not guessing etc )

For that We need a good clock in order to have any chance of pinpointing the
"shortest day"

Yes , Percy, unfortunately spring can be far behind...
But yes it will come...

Update of some charts that have been posted previously...

Daily bar and volume overlaid with
bullish percent
percent above 200 EMA
A/D

and cumulative up down volume ( of every stock in the XAO )
( You can see some nice divergences earlier BUT NONE NOW )

also the same P&F previously posted
It could start soon start to define a larger distribution pattern .

there is following
there is reacting
then there is responding

A good start at an inductive analysis ( working from the technical position of particular stocks rather than the action of the composite index )

Google will give some good background to bullish percent
( Like all P&F it is a timeless chart that times ( who or what draws the columns ? )

some info previously posted



motorway

Re: XAO Analysis

treefrog said:

so very roughly 1300% pa since '82, so mean growth gives a correction target of 4000??

Click to expand...

big whoops! - lose the "pa", should have been 1300% since '82

Re: XAO Analysis

Synergy said:

Lets all draw on the same graph... Just wanted to put it into perspective...

Click to expand...

For sure...not much is going to substitute for the vigour of a prolonged bull market like pre-'87 and '03-'07. However, if you are running a LTTF system those little rises I marked up on the chart are tradable. And if conditions were such that your system managed to latch onto a handful of beneficiaries during these positive periods then you will be adding to your equity during them and maintaining that equity during the inevitable declines. In otherwords, what the newspapers and forum posters are reporting as bad times eg. "now we're in a bear market", "it's not as good as it once was!", "the bullmarket is dead!" etc. can still include periods with agreeable conditions for operators of LTTF systems.

LTTF = Long Term Trend Following.

ASX.G