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XAO Technical Analysis

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Re: XAO Analysis

dhukka said:
If past bear markets are anything to go by we will experience some short sharp rallies that last several days or weeks that may add as much as 10% or more. To be proven wrong of course.
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Looks like we are getting a decent rally out of this. Already bounced more than 7.0%. However if history is any guide, we should be wary of short sharp bounces because they usually fail and the market ends up diving lower. The chart below shows a couple of short rallies in 2002-2003 that ultimately failed.
 

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Re: XAO Analysis

So wat does everyone think is the go for tommorow ?
I sold my BNB today and am hoping to get back in at about 17.50 - 18.00 ?
This will offset some capital gains for the year....

BNB has bounced back like crazy lately !
 
Re: XAO Analysis

VViCKiD said:
So wat does everyone think is the go for tommorow ?
I sold my BNB today and am hoping to get back in at about 17.50 - 18.00 ?
This will offset some capital gains for the year....

BNB has bounced back like crazy lately !
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Hi Vicki, futures are looking for a strong upward move, but I don't think that they have fatctored in the latest news regarding Societe Generale's problems.

Personally I think you may have sold your BNB a little early - but if you made a profit, then no one can argue.

I think we are in for another good day tomorrow.
 
Re: XAO Analysis

VViCKiD said:
So wat does everyone think is the go for tommorow ?
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Another 2 to 3% higher, maybe more on the strength of less negative news from the US. :)

I see your point dhukka, but I think we were overdone down because of the failure of Bush and the Fed to act sooner. Now that it appears that the economy has Bush's full attention and the Fed has jumped into gear, whether or not it is the right gear, the market has and will get what it wanted.

Roland, I don't think Societe Generale's problems will have much of an affect since it is a fraud issue with some potential to recoup it. :2twocents

PS: And base metals and POG look like firming too.
 
Re: XAO Analysis

roland said:
Hi Vicki, futures are looking for a strong upward move, but I don't think that they have fatctored in the latest news regarding Societe Generale's problems.

Personally I think you may have sold your BNB a little early - but if you made a profit, then no one can argue.

I think we are in for another good day tomorrow.
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Damn u're right.. I jumped the gun on that one .... I think I am gonna stick that money into OXR. I sold BNB at a loss... My biggest loss so far... :banghead:
 
Re: XAO Analysis

Whiskers said:
Another 2 to 3% higher, maybe more on the strength of less negative news from the US. :)


Roland, I don't think Societe Generale's problems will have much of an affect since it is a fraud issue with some potential to recoup it. :2twocents

.
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Soc Gens problems have been doing the rounds for the best part of this week... methunks they have been factored in and then some.. :)
Cheers
........kauri
 
Re: XAO Analysis

Whiskers said:
I see your point dhukka, but I think we were overdone down because of the failure of Bush and the Fed to act sooner. Now that it appears that the economy has Bush's full attention and the Fed has jumped into gear, whether or not it is the right gear, the market has and will get what it wanted.
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Whiskers,

That the US government is getting involved by implementing a fiscal stimulus should tell you that things are bad. The government always shows up late to the party. By the time they pass a bill and mail out the checks it will be 3Q08.

Also it continues to amaze me that people think interest rate cuts can actually do anything significant. What we saw on Tuesday in the US was Bernanke postponing the inevitable. The market may rally for a few days or a few weeks but when the hit wears off the junkies will come back down to earth. The Fed cut 500 basis points in the last easing cycle while the S&P fell 50%.

Whilst we had quite a precipitous fall with 12 consecutive declines in the XAO. History tells us that the market never recovers on it's first try, it usually fails several times before the market ultimately hits bottom. Even in 1987 when the XAO fell further and more sharply than we saw this time around the market had two very short, sharp rallies of more than 5%, both of which failed. You can see the charts here.
Of course every bear market/correction/crash is different. However history suggests what we are seeing now is nothing more than the usual sucker's rally.
 
Re: XAO Analysis

Hi Dhukka

I know the US is in a mess and like you, I think they are not going about fixing it the best way... but I'm just taking an observational position in that the yanks are what the are and they will do what they do.

Based on the premise that they will keep proping up their economy until it ultimately fails my theory is that the rest of the world will steadily disconnect from reliance of it so that when it does gasp it's last breath it's influence/impact on the rest of the world will be significantly reduced.

In the meantime, as I have said before, given that the Fed had broadcast that they would cut rates agressively to save the economy, I think we wouldn't have had the last few days of heavy falls if the Fed had made it's cut promptly last thursday or friday as the market expected.

The US indicies may well decline a bit further, but now that Bush and the Fed have jumped into gear I reckon we will get back to around 6000 and pretty much trend sideways. I don't know if you noticed an observation I posted with a chart earlier that the Aus market moved more wildly relative to the US.

My theory is that the main concern was not so much about the health of the US economy, but the lack of action to address it. That is I reckon people were afraid their economy would spiral totally out of control because everyone was sitting on their hands. Now that they have jumped to attention I think the perception is (rightly or wrongly) that whatever needs to be done will be done.

It's a forward looking market and I think there is also an element of perception that there will be a change of US government at the end of the year and they just have to survive till then and almost anyone will manage the economy better than the Bush administration.

I guess we will have to see who turns out to be right.
 
Re: XAO Analysis

dhukka said:
Looks like we are getting a decent rally out of this. Already bounced more than 7.0%. However if history is any guide, we should be wary of short sharp bounces because they usually fail and the market ends up diving lower. The chart below shows a couple of short rallies in 2002-2003 that ultimately failed.
Click to expand...

I think you might have the wrong chart....see 1929 and 1987... they might point you in the right direction;)
 
Re: XAO Analysis

dhukka said:
See my blog with a chart of 1987 here.
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Fully agree with what your saying in your blog and good work but is it possible to change/edit the time frame of the current (2008) chart to the same as the others to give a better comparison with the others.....2008 says jan ..jan..feb..feb..mar..mar others say jan..feb..mar
this will give a better picture of what the future holds
cheers dhukka
 
Re: XAO Analysis

The current chart is a shorter time frame because obviously I cannot provide details of the bottom and the subsequent rally off that bottom. The point of each graph was to show that the market has never rebounded and continued higher on it's first try. Will this time be different?
 
Re: XAO Analysis

Now what direction? Will it continue to 6000 over the next two weeks with america's rescue program and aussie reports coming out. Or will it have to retreat before it comes back up
 
Re: XAO Analysis

dhukka said:
The current chart is a shorter time frame because obviously I cannot provide details of the bottom and the subsequent rally off that bottom. The point of each graph was to show that the market has never rebounded and continued higher on it's first try. Will this time be different?
Click to expand...

No Dhukka I dont believe it will be different but an in scale chart will show you 2008 looks more like 1987 than the others with a very sharp drop off and very short first rally similar to 1987. Bottom on xao for me will be 4000-4500 just by looking at the 10 year chart. I know you cant chart the future but if your 2008 chart includes up to 1/6/2008 it will give you the right scale even though the remainder will be blank. Thats if its possible with your setup.
 
Re: XAO Analysis

Snakey said:
No Dhukka I dont believe it will be different but an in scale chart will show you 2008 looks more like 1987 than the others with a very sharp drop off and very short first rally similar to 1987. Bottom on xao for me will be 4000-4500 just by looking at the 10 year chart. I know you cant chart the future but if your 2008 chart includes up to 1/6/2008 it will give you the right scale even though the remainder will be blank. Thats if its possible with your setup.
Click to expand...

Yeah, I could do that snakey but can't be bothered to be honest, creating those charts was a bit of a pain. It would only take about 15 mins to change it and re-post but it's a bit fiddly.

Agreed 2008 looks more like 1987. 2002-03 and 1994-5 saw 22% declines from peak to trough, 1987 was 50%. I think this time round will be somewhere between those two.
 
Re: XAO Analysis

MS+Tradesim said:
An 87 style fall-out is certainly possible. Other possibility is an 01 type of follow-up:
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Or it could be what has been posted previously - 01 type follow up.

To state that the market has never rebounded and continued higher on it's first try is a very general statement and I'd question the accuracy.

I know the circumstances are always different in each situation (and we are supposedly in a bear market now) but didn't we bounce back from the first subprime fallout in Aug this year to a record high without too many 'sucker rallys'

I think that with the reporting season in Australia upon us and the US Gov/Fed working in tandem and doing all they can to support their economy there is a fair chance this downward spiral could correct itself.

But hey who knows, I'm certainly being very cautious at the moment but am a bit more optimistic than I was a week ago.
 
Re: XAO Analysis

Never bet against the Fed as they say .....

These guys just make a mockery out of capitalism and free markets, their Interest rate is now lower than Inflation and likely to go lower, essentially free money.

How the USD retains any value at all is a joke, guess we can now expect US corporations etc to start snapping up all the worlds assets with their free "funny" money ?

I reckon if the USD wasnt used as the worlds reserve it would be worth like 1/10th of what it is now. I still think the end game will be the same, complete collapse of the USD and perhaps all fiat currencys, but who knows how long any of that will take, just got to play the game I guess, least we get decent Interest rates down here to protect the value of our money.

:)
 
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