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XAO Technical Analysis

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Re: XAO Analysis

Damn, we are in for an interesting Wednesday! Im sure there were a lot of people taking short positions the last couple days! Sure to make a packet!
 
Re: XAO Analysis

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BOTTOM LINE
4/2 :
EW Trend: Corrective
Price Trend: Up
Trend Strength: Weak
Broker Consensus: n/a


TECHNICAL DISCUSSION
4/2:
VIDEO ANALYSIS (2 mins 27 secs)
LAYMANS: The bears have offered conciliatory gestures to the bulls over the last week or so but its more than likely that they'll wrestle back control and drive prices lower, most likely taking out the major lows recorded on Jan 22nd and 23rd. I have said constantly that bear market rallies are confusing and nasty for traders, new and old. What we've just witnessed is a classic example. Short. Sharp. Powerful. Enough to make you stop and think that, yes, just maybe, the bull is back. The important level we've been watching was 6105. Above that suggests the bear trend moves back to a more neutral state. We tried hard today, so very hard, to take it on but today instead was a day of rejection and bear control. The close was at the lows of the session and there can only be one answer for that activity - sellers. The good news, if I can suggest such, is that this sharp advance has taken the 'sting' out of the market, at least for the near term. Its probable that the expected declines now should just nudge the January lows by a small margin only. Summary - expect weakness over the coming weeks back to 5200 or a tad lower. We should then bounce before embarking on another round of selling which will take us through to the 4800 level.

TECHNICAL: The pattern off the January lows extends up in a perfect a-b-c correction and todays weak close basically suggests the advance has completed at todays highs. We're either at a wave-iv or larger degree wave-A level and that weakness should set in almost immediately. The depth of this wave-iv has been extreme and this usually means wave-v will be stifled. As such I'm looking for the 5200 lows to be tested and perhaps breached, but only just. This next thrust down will complete the wave-v and also the larger degree wave-3. The wave-4 bounce could be a long winded affair taking several months before another nasty wave-5 takes hold and drives prices down to 4800. The Reserve Bank meets tomorrow ans its widely expected that rates will rise. This is fully priced into the market. What we need to listen out for is the rhetoric coming from the Bank. If they offer the slightest hint that rates have gone high enough then we'll see some strength and confidence return. However, its starting to be expected that another rate rise will be on its way. If the RBA mentions this then we'll be back at 5200 very quickly indeed.

TRADING STRATEGY
4/2:
An aggressive trader could short this market right here but quite frankly the volatility is just too extreme for many accounts to handle. Possibly the better alternative is to sell call spreads above the market for the February and/or March expiry. High volatility and time decay will see these spreads drop quickly if the markets start to quieten down. Any move above 6105 would be reason to reverse the short spreads and stand aside until the pattern returns. The holding of any long stock positions should be managed aggressively and stops tightened up accordingly.


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Re: XAO Analysis

Kauri said:
It's not all bad news...

:D US bond yields have continued to fall, with fresh lows on the ten-yr bond currently being traded at 3.537% as the market prices in a 90% chance of a total 75 bp in rate cuts for the March and April meetings. :D

Cheers
............Kauri
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Maybe courtesy of Big Bank derivative gamblers piling into the monstrous smoking kitty with what's left of their dwindling asset cover....?? I really don't want to be around if/when that smouldering derivatives pot goes up in theirs (and our's) faces.

Looks like the Fed might have to ride rates all the way to 0% within 3 months, at this rate of economic collapse in the US. What can they do then???


AJ
 
Re: XAO Analysis

Aussiejeff said:
Maybe courtesy of Big Bank derivative gamblers piling into the monstrous smoking kitty with what's left of their dwindling asset cover....?? I really don't want to be around if/when that smouldering derivatives pot goes up in theirs (and our's) faces.

Looks like the Fed might have to ride rates all the way to 0% within 3 months, at this rate of economic collapse in the US. What can they do then???


AJ
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Negative Interest rates?? j/k. This'd be akin to the government giving away money, or printing it...hang on a second....:eek:
 
Re: XAO Analysis

True, the bond yields have dropped.

The biggest market, Forex, disagrees that the Fed will drop the rates. The dollar index was up on yesterday and steady during the trading session. The gold price dropped as well.
 
Re: XAO Analysis

tex.willer said:
True, the bond yields have dropped.

The biggest market, Forex, disagrees that the Fed will drop the rates. The dollar index was up on yesterday and steady during the trading session. The gold price dropped as well.
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flight to safety.. especially in bad times..
also for what it is worth a lot of punters see the US now being pro-active in their attempts to get things sorted economically, whilst the Eurozone is seen to be in denial and acting re-actively and slowly.. the spin is that the US will then come out of it earlier and more robustley...
by the way.. a few Eurozone financial institutions that have had Ninja turtle eggs quietly incubating in their cellars are now noticing that they are starting to hatch... Kowabunga dude... RBS???
cheers
..........Kauri
 
Re: XAO Analysis

Hammering in the US, BHP profits a hint off some estimates, & increasing bid, base metals took a beating ... perhaps a wave of panic selling then? :p:
 
Re: XAO Analysis

numbercruncher said:
Somethings not quite right in the world when Politicians are talking pay cuts for themselves ! :cautious:



http://www.abc.net.au/news/stories/2008/02/06/2155396.htm?section=justin
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It is called Labour's 'War on Inflation'. Razor gangs are currently scouring the country, slashing and burning to curb the great evil.

Would have thought a 'GLOBAL RECESSION' would take care of inflationary pressures in the Australian economy. But go for it Kevin and Julia - lead heroically by example. Heck I might go to the boss today and ask for a bit less myself. For King & Country.
 
Re: XAO Analysis

wayneL said:
Good God! What next? The 144,000 in white robes? Seven angels with seven plagues? :eek:
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Oh man ... :eek:


Americans have long taken the wonders of medical science for granted, watching as disease after disease has been conquered with antibiotics, vaccines, better nutrition and pharmaceutical "miracle drugs." But today, the magic isn't working ? and something scary is happening.
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http://worldnetdaily.com/index.php?fa=PAGE.view&pageId=45860
 
Re: XAO Analysis

Swan says that the high AUD is subject to market influences, one of which is the tighter monetary policy espoused by the RBA. The RBA hiked its official cash rate 25 bp yesterday to 7.0%. Rudd noted yesterday that the latest rate hike will really hurt (the economy). Sheesh Kev.. the average punter will appreciate that as they turn their pockets inside out...
Cheers
..........Kauri
 
Re: XAO Analysis

Unfortunately for Labor, they got elected in the middle of a global market tubulence.

The average person will be unable to distinguish that it's world forces operating at the moment.
 
Re: XAO Analysis

Anyone else think we'll be down 200pts+ by the close today? Might get a lot of folks closing their positions ... futures aren't exactly inspiring for a global rally.

Then again, if history repeats over the last few weeks; we're due for a rally Thurs/Fri ... I don't have the stomach for it though. :D Is it a case of today's bargains are tomorrow's forecasts? Or are bargains just bargains?

Edit; Of course, just wild crazy speculation!
Alright; some analysis! Does seem to be on an intraday downtrend :p:
 
Re: XAO Analysis

Nyden said:
Anyone else think we'll be down 200pts+ by the close today? Might get a lot of folks closing their positions ... futures aren't exactly inspiring for a global rally.

Then again, if history repeats over the last few weeks; we're due for a rally Thurs/Fri ... I don't have the stomach for it though. :D Is it a case of today's bargains are tomorrow's forecasts? Or are bargains just bargains?

Edit; Of course, just wild crazy speculation!
Alright; some analysis! Does seem to be on an intraday downtrend :p:
Click to expand...

The Lil' Ozzy Bleeder just slit the other wrist..... lookit all that scarlet.....

*sigh*

PS: Mebbe touch down at 5000pts this dive-time?
 
Re: XAO Analysis

Not trying to be a pessimist... I would love to read the opinion of the experienced forum chartists/traders.

It seems pretty obvious that last year the market was way ahead of itself.

Your thoughts appreciated.
 

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