XAO Technical Analysis

[CanOz]

Re: XAO Analysis

I can't believe theres not more analysis going on here. What huge day considering the recent falls....is this distribution at its finest? I can't see the volumes for the day, but that candle looks bullish to me.

Cheers,

 

[Uncle Festivus]

Re: XAO Analysis

I can't believe theres not more analysis going on here. What huge day considering the recent falls....is this distribution at its finest? I can't see the volumes for the day, but that candle looks bullish to me.

Cheers,

Hi CanOz,
My simplistic approach doesn't see any volume in this surge, being a public holiday in some states and also being a Monday, when some say the super funds get their buying orders filled. Other major markets are straining tonight, we'll just have to see where the Dow finishes, but I expect a retracement tomorrow.

 

[CanOz]

Re: XAO Analysis

Thats exactly what i suspected, a lack of volume. My limited experience has left me short of expectations here. Seems like a curious anomoly to me....why would such a lack of volume be able to push prices higher in the broader market at this stage?



Cheers,

 

[theasxgorilla]

Re: XAO Analysis

I can't believe theres not more analysis going on here. What huge day considering the recent falls....is this distribution at its finest? I can't see the volumes for the day, but that candle looks bullish to me.

Cheers,

It's bullish alright.

Today’s 1% rise on the XAO makes it even harder to answer the question, where are we? The "Elliott Wavers" believe that the initial drop was a wave A and this move up from the support found at 5650 is a corrective wave B.

I can tell you exactly where we are according to my (technical analysis) reference points. The XAO is now substantially above the 40-day SMA and its broken up through the 4x1 line. Today’s bullish price action is particularly intriguing as it occurred on slightly below average volume. VMAers might tell you this suggests that below average force was required to effect an above average price move. Adding further to this bullish picture of the XAO is the observation that 4 out of the last 5 days have closed very near to their highs.

To temper this bullish perspective, a exerpt from Prechter and Frosts 1978 Elliott Wave Principle...

"During the A wave of a bear market, the investment world is generally convinced that this reaction is just a pullback pursuant to the next leg of advance. The public surges to the buy side despite the first really technically damaging cracks in individual stock patterns." The B-wave rallies that follow exhibit "aggressive euphoria and denial."

 

[CanOz]

Re: XAO Analysis

It's bullish alright.

Today’s 1% rise on the XAO makes it even harder to answer the question, where are we? The "Elliott Wavers" believe that the initial drop was a wave A and this move up from the support found at 5650 is a corrective wave B.

I can tell you exactly where we are according to my (technical analysis) reference points. The XAO is now substantially above the 40-day SMA and its broken up through the 4x1 line. Today’s bullish price action is particularly intriguing as it occurred on slightly below average volume. VMAers might tell you this suggests that below average force was required to effect an above average price move. Adding further to this bullish picture of the XAO is the observation that 4 out of the last 5 days have closed very near to their highs.

To temper this bullish perspective, a exerpt from Prechter and Frosts 1978 Elliott Wave Principle...

"During the A wave of a bear market, the investment world is generally convinced that this reaction is just a pullback pursuant to the next leg of advance. The public surges to the buy side despite the first really technically damaging cracks in individual stock patterns." The B-wave rallies that follow exhibit "aggressive euphoria and denial."

WTF does it say about wave C!!!!

 

[theasxgorilla]

Re: XAO Analysis

WTF does it say about wave C!!!!

If we get a zig-zag correction (a la May 06) then during a zig-zag wave C can often be as long as wave A. Projected from today's high this puts us right at the 5480 support level, or the 50% retr. zone.

 

[CanOz]

Re: XAO Analysis

Struth...the next couple of days will be the critical juncture.

Still...what an amazing time to be watching...much more so than May.....for me anyway.

Cheers,

 

[Kauri]

Re: XAO Analysis

It's bullish alright.

Today’s 1% rise on the XAO makes it even harder to answer the question, where are we? The "Elliott Wavers" believe that the initial drop was a wave A and this move up from the support found at 5650 is a corrective wave B.

Not necessarily.. there's more than one way to skin a dead-cat..

 

[Kauri]

Re: XAO Analysis

and not too sure about interpreting vol yet, but would todays low vol signify a lack of committment from buyers??

 

[theasxgorilla]

Re: XAO Analysis

Not necessarily.. there's more than one way to skin a dead-cat..

Touche

The trend (in my eyes) is still up, so I maintain a bullish-bias. Perhaps you can explain the possible implications (price targets?) of a 5-wave move down?

 

[theasxgorilla]

Re: XAO Analysis

and not too sure about interpreting vol yet, but would todays low vol signify a lack of committment from buyers??

I intepretted it as a lack of committed sellers, therefore with the trading that did occur the buyers were forced to chase higher prices to fill their orders due to a lack of depth of sell orders. I'm a noob at this VMA stuff though.

 

[nizar]

Re: XAO Analysis

ASXGorilla - 5480 is pretty close to the 200dma as well, which is where the XAO has found support on previous corrections eg. mar05, oct05, may06.

Can - Maybe you should do more than just watch theres stocks breaking out all over the place and also with CFD indices you can do well.

 

[Kauri]

Re: XAO Analysis

I intepretted it as a lack of committed sellers, therefore with the trading that did occur the buyers were forced to chase higher prices to fill their orders due to a lack of depth of sell orders. I'm a noob at this VMA stuff though.

I'm a nooby too, so far I have found that another bar or three (hic) helps to clarify it.

 

[theasxgorilla]

Re: XAO Analysis

Can - Maybe you should do more than just watch theres stocks breaking out all over the place and also with CFD indices you can do well.

I have some shorts in via CFD at the moment, and may place one more tomorrow. The absolute best case for me would be that the shares I've shorted tank...the rest of my shares that I hold medium-to-long term positions in also fall (but don't stop me out) and form troughs, and then at the confirmation of the troughs and resumption of bullishness I can pyramid and away we go until October 2007.

Sound a little too good to be true?

 

[CanOz]

Re: XAO Analysis

ASXGorilla - 5480 is pretty close to the 200dma as well, which is where the XAO has found support on previous corrections eg. mar05, oct05, may06.

Can - Maybe you should do more than just watch theres stocks breaking out all over the place and also with CFD indices you can do well.

Oh no, i'm FULLY commited long in two stocks atm, stops in place though. Just facinated with the price/volume characteristics of the XJO, absolutely bewildered. I will be trading long and short soon, bit of learning left to go though, thanks Nizar.

Love that comment about "more than one way to skin a dead cat"...that has got to be the comment of the year! Very clever Kauri.

Cheers,

 

[coyotte]

Re: XAO Analysis

I intepretted it as a lack of committed sellers, therefore with the trading that did occur the buyers were forced to chase higher prices to fill their orders due to a lack of depth of sell orders. I'm a noob at this VMA stuff though.

This is the point that confounds me -- one often hears it on Bloomberg.

What is more important -- Lack of Sellers or Lack of Buyers?

Would have thought that the BUYER was the KEY -- after all the value of anything is what the next BUYER is willing to pay.

Cheers

 

[Uncle Festivus]

Re: XAO Analysis

All I can say is that I saw the same volume pattern emerge in the DOW before the correction, and I see it in the XAU now. Buy orders having to be filled, sellers on the sideline waiting to see what happens?. As per earlier post, after a gain of 1% do we really think we are going to get another, especially when all states are trading tomorrow, and the DOW is down at the moment?. CBA hardly moved yesterday, banks might be showing the way for the stocks that are still overvalued at these levels, and end of ex div season?.

 

[theasxgorilla]

Re: XAO Analysis

This is the point that confounds me -- one often hears it on Bloomberg.

What is more important -- Lack of Sellers or Lack of Buyers?

Would have thought that the BUYER was the KEY -- after all the value of anything is what the next BUYER is willing to pay.

Cheers

It's complicated isn't it?

I find it's much easier to observe on the smaller-cap shares that have lower average daily volume. In some instances you can have several days on end where volume is very low, bordering on absent. And you know what? That's okay, because whilst there might be buy and sell orders both higher and lower than the current bid/offer, neither side is budging. If a large enough order enters to the buy side then it will push prices higher as it will have to work it's way up through those sell orders in the system, chasing prices higher. This makes sense right, price moves up on high volume. Logical.

But now think about what it would mean if price moved up substantially on below average volume. It would mean that all the sell orders at and above current levels had dried up. Any buyer who wanted to get even the smallest of fills would have to work his way up through thinning sell side market depth, thereby chasing prices much higher.

So, sometimes a lack of sellers can say as much as a large buy order says about what the crowd thinks.

Today, on the XAO, we had a lack of sellers.

 

[Uncle Festivus]

Re: XAO Analysis

Today, on the XAO, we had a lack of sellers.

Smells like a bull trap to me. Is this the plateau day before the bystanders decide to pull the pin. The major banks are leading the way down, most in the red after the spurt this morning. The tape suggesting buy orders are being met with the sellers today, at least for the banks. March SPI and index options on Thursday, Friday the sell-off?

 

[theasxgorilla]

Re: XAO Analysis

Looks ominous, doesn't it?