XAO Technical Analysis

kengaikl · 2 February 2008

Re: XAO Analysis

Random Walk said:
Exactly! If the bid is more likely to fail, BHP’s share price might rise given that the share price of the bidder seems to fall in most takeover bids. (Similar to the share price action for another example close to our hearts; ZFX’s takeover bid for Allegiance.)

How much of the rally we're seeing is due to BHP/RIO? If their share prices fall back on their large gains (e.g. maybe b/c BHP announces a higher bid), will the fall on the XAO spook investors and create panic selling?

BHP and RIO are basically the same business just that BHP is larger and is cheaper interms of PE's. So if there is interest in RIO shares logically there will also be interest in BHP shares, especially if BHP are trading at a lower PE that RIO.

cordelia · 2 February 2008

Re: XAO Analysis

Nyden said:
Perhaps this is what is to become the norm of crashes, what with almost every Australian having online access ... fast selling, fast buying. I'm sure the % of internet users has vastly increased since even just our more recent crash, could this be a factor? And if that's the case, gone are the days of buy/hold/never sell ... nothing will ever be valued on fundamentals as everything becomes 'hot', markets will just be a big ol' casino!

Nyden...You have raised an interesting point..i believe the internet has made a difference to the way things play out.....certainly some people know about events before the news reports them. However I don't think it can be attributed to the Internet alone...its communication in general..cable TV etc etc.

There's a lot of avenues for those who wish to find out information ahead of the pack. Take this forum for example....I have learnt so much by reading the excellent posts here that reading the newspaper or watching the news has become a bit of a waste of time...

How much research you do is a matter of choice. Technology has empowered those willing to take responsibility for their own finances (amongst other things) but not everyone chooses to embrace it. It might surprise you to learn how many people have very little knowledge of current technology. ...particularly the Internet....and still rely on mainstream media for info.

I wouldn't have thought all Australians who trade shares belong to this forum....or do so online. Be interesting to find out.

It stands to reason that those who have access to news ahead of others react sooner than those who are still dependent on newspapers and the six o'clock news to keep them informed....Today different groups of people find out things at different stages. A crash seems to be a more drawn out event...

It maybe that in previous crashes the majority of people (not all) were reliant on mainstream media to find out what was going on.....Information was not as readily available as it is now to the general public.....Hence the majority found out pretty much at the same time and the reactions swifter.....

We live in a different world.

MR. · 2 February 2008

Re: XAO Analysis

"Everything" happens quicker.....

How is it that so many people in the past are caught by a market crash and recession? Something to think about.

I came through 87 and later paid 16% on my house and 19% interest on my factory.
Seeya.....

nikki · 2 February 2008

Re: XAO Analysis

wavepicker,

can i ask whether elliot wave theories predict the same outcomes whether you have entered into a bear market (not that i have a clue what that means). . . . also, would not your plotting these days have to sit on top of what you migth see in the DJIA (whether we like it or not) . . . . . .

thanks for posting your chart . . . . . .

motorway · 2 February 2008

Re: XAO Analysis

motorway said:
Try this one

visualize what the demand and supply curves are doing

The Bullish % never has stayed at the bottom long ( days ! )

( so what should We be doing )

On relative strength (CRS )
as a guide

In flood tides
An anchor is likely to have the best .

Make sure You don't buy anchors

ie DEAD WEIGHTS

A key word on reversal patterns atm
is "DELAYED ENDING"

The bullish percent prev extreme low reading was oct 97

motorway

Remember the seasons of the market unfold in their own time
Each season sows the seeds of the next

Winter is the beginning
BECAUSE it is an end...

Enough work YET ?

Just Update those charts
B% moved up from that low of 6.6% to 28%

The P&F displays the shape of a classic market cycle
Those Seasons --->Winter through Summer to Winter

( S curve following a Minsky pattern ?)

But There has been a real shift in Demand supply reality
So I do not expect that any deep retracement of the entire cycle is warranted ( China is real etc )... But that does not mean that the next cycle will be as spectacular as this ( at the level of the XAO as an index)..

Maybe more ranging and creeping like the cycle previously
(ther will still be a summer though ) but that depends

A little window on how adaptive and sensitive P&F is
The B% will be very fast in reflecting support ( buying pressure ) and resistance ( selling pressure )

At 6.6% a Market is broken or very very oversold ( remember the shortest day comes early at the beginning of winter)
Now the B% will adapt very quickly
and help reveal market structure... ( possibly a narrowing of activity as demand and supply lines converge a little more )

motorway

Whiskers · 2 February 2008

Re: XAO Analysis

From last week:

Whiskers said:
On the weekly although the tail went below 100% the weekly candle finished above the 78.6%, so I not going bearish yet.

I'm not expecting much retracement in the next week, ie I will be very surprised if it goes below 5,700. I expect the market to trend in the post Aug 07 low SDC and push up beyond the post Oct high SDC in the coming weeks... just to disprove a down trend and confirm consolidation or continuing slower Bull run.

Having a bit of a longer term look on the weekly chart this time, still pretty much going to plan. Importantly, only the tail dipped below 5,700, and I see the usual indicators tending positive for the near future.

People have made some resemblences to the last Aug correction and 1987 crash. My view is that mid 06 is probably a better comparison.

Just for illustration purposes I see the XAO trending something similar to mid 2006 for the next few months, ie we have found bottom and will tend fairly flat around the long term trend line (yellow) for a few weeks until we establish where to go from there, which I am still inclined to think slightly bullish.

Next week I might reveal my notion of proportion in the context of why a fibonacci retracement of the same percentage to 1987 is not applicable.

Interesting concept you use motorway. I vaguely understand the technology, but I think I get the philosophy behind it. I think my notion of 'proportion' is roughly about the same thing.

willow · 4 February 2008

Re: XAO Analysis

This folds up the series of charts I've posted since the 15th Dec 07 on this thread. The chart below was posted on the 24th dec p95 and is now updated showing the warning it suggested was indeed worth taking notice of. It is one of the charts I used to give me cautious confidence to go in heavily on the pullback of the recent head and shoulders neckline on the daily chart. p94+96.

The arrows on the rate of change indicator are at the extreme oversold level and are all over 3 years away from any previous extreme reading. The vertical bars on the XAO are in conjuntion with these arrows.

These events occured while the XAO was trending up and gave a clear sign of loss of momentum in the trend. In all cases apart from one, the low on the XAO where the extreme readings occured was eventually breached. The only period where it didn't happen was the 97, 98 period where a double bottom of the weekly close occured instead.

I want to thank this forum for giving me the opportunity to post these charts. It has truly been an adventure and a highlight in my trading career. To be involved in a fall of such magnitude can only make one grateful. I would like to add for the people who need it, that once you find a method you are comfortable with and have tested it then be patient (wait for the best opportunities, etc), cautious (go in small until you build up your experience and your account, etc), and finally, to learn to take the hard times gracefully, it is easier and quicker to learn from them when you aren't cursing over them or putting yourself down and believe me it is learning from these hard times that plays a major part in helping to make us successful traders. We have paid a fortune for these lessons so make the most of them.

A famous trader once said "it takes a great deal of boldness and a great deal of caution to make a great deal of money in the stockmarket" Cheers. Willow

Whiskers · 4 February 2008

Re: XAO Analysis

willow said:
This folds up the series of charts I've posted since the 15th Dec 07 on this thread.

I want to thank this forum for giving me the opportunity to post these charts. It has truly been an adventure and a highlight in my trading career. Cheers. Willow

You're not leaving us are you willow?

treefrog · 4 February 2008

Re: XAO Analysis

closest (but not quite yet) to a cross since the last one - way back in june 2003

Sean K · 4 February 2008

Re: XAO Analysis

treefrog said:
closest (but not quite yet) to a cross since the last one - way back in june 2003

Need a semilog chart for that timeframe I think frog. I imagine we might still be above. To be confirmed by a greatpig chart.

treefrog · 4 February 2008

Re: XAO Analysis

nice bear run on the XJO this arvo - looking likely to close the day in the red
financials appear to be doing most of the damage

powerkoala · 4 February 2008

Re: XAO Analysis

here come the roller coaster....
up 180 points.. down 180 points....
end up 39 points....
this market really drives me mad
tomorrow will be down... 200 points...
then up 200 points and end up down 39 points..

kash · 5 February 2008

Re: XAO Analysis

Should be a down day today with the rates decision due and amer. down. Probably will drop fast but with BHP/RIO T/O maybe becoming formal tomorrow and BHP half yearly report due should finish only slightly down as people wait to see what happening.

GreatPig · 5 February 2008

Re: XAO Analysis

kennas said:
To be confirmed by a greatpig chart

17 & 34 weekly?

This is what I have: just crossed (blue and green lines). Last cross, in opposite direction, was around June/July 2003.

Cheers,
GP

Logique · 5 February 2008

Re: XAO Analysis

The XAO is still in "death cross" where the 50 EMA has crossed below 200 EMA, which is a bearish sign. I can post up a chart if the mods want, but its easily checked by traders.

austek · 5 February 2008

Re: XAO Analysis

I Like the simplicity of 'big pig' chart and the "log" method using longer time frame averages to show the severity of the market as of now.

Does this mean what I think it means, a beeaarrr market for the coming years or just a volatile hiccup over a few months.

austek · 5 February 2008

Re: XAO Analysis

I could have added my own thoughts in that we sit out or short term trade the volatility until it becomes clearer that the 50e may close below the 200e.

Then we start to look like the stagnant period in the nineties

cordelia · 5 February 2008

Re: XAO Analysis

willow said:
I want to thank this forum for giving me the opportunity to post these charts. It has truly been an adventure and a highlight in my trading career.
A famous trader once said "it takes a great deal of boldness and a great deal of caution to make a great deal of money in the stockmarket" Cheers. Willow

Thanks very much for posting the chart together with such an excellent explaination. I am new to charting and most of the time don't really understand all the terminology so its really helpful when someone makes an effort to clarify what it all means so that the less knowledgeable can grasp it too. I am sure I am not the only one to appreciate the extra effort it takes to do this.

thanks Willow

nikki · 5 February 2008

Re: XAO Analysis

could someone help me understand what the significance of the crossover is between the EMA's.......

does it reveal more in terms of whether we are bearish, etc. . ... . . . . .

thanks for your charts.

treefrog · 5 February 2008

Re: XAO Analysis

nikki said:
could someone help me understand what the significance of the crossover is between the EMA's.......

does it reveal more in terms of whether we are bearish, etc. . ... . . . . .

thanks for your charts.

mostly depends on what your trading period is nikki - the two mentioned when applied to weekly charts are used by some to indicate a reversal of sentiment - but they can also be used on the day charts and they would be much quicker and cross more often - five times quicker roughly speaking

whole thing depends how you have decided to trade/invest and what gives you exit and entry signals

XAO Technical Analysis

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