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XAO Technical Analysis

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Re: XAO Analysis

tex.willer said:
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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just can't help liking 4760 on your monthly or the weekly or the daily - its the 50% retrace of that stella bull run and some nice support there tex
 
Re: XAO Analysis

Not a fundie but with WOW & now BHP reporting rather poor results, is the writing on the wall that we won't be saved by reporting season?

Alot of the bulls have been saying we will be shielded from a downturn in the USA by demand from China/India and our economy won't be affected as much etc etc. But if companies like BHPs net profit is already starting to drop, the upside is looking alot more limited than the downside atm, especially if we get any sort of slow down in China.

The banks are the ones I'll be watching with interest if profits aren't to expectations the next 6-12 months could be very very interesting considering the amount of time the flow on from the problems overseas will take to filter through to us here in Oz.
 
Re: XAO Analysis

nomore4s said:
Not a fundie but with WOW & now BHP reporting rather poor results, is the writing on the wall that we won't be saved by reporting season?

Alot of the bulls have been saying we will be shielded from a downturn in the USA by demand from China/India and our economy won't be affected as much etc etc. But if companies like BHPs net profit is already starting to drop, the upside is looking alot more limited than the downside atm, especially if we get any sort of slow down in China.

The banks are the ones I'll be watching with interest if profits aren't to expectations the next 6-12 months could be very very interesting considering the amount of time the flow on from the problems overseas will take to filter through to us here in Oz.
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Pretty much the discussion in the BHP thread.

It appears the writing is on the wall.

I thought there would be a good chance reporting season would pull us out, but it appears the last hope is gone!

Looking at your thread and seeing your picture out of my peripheral vision, I thought it was a nuclear bomb mushroom cloud! Appropriate, but a bear causes just as much damage!
 
Re: XAO Analysis

If you analyse the BHP reports 6 months ago and now, you'd notice that Nickel was an important part in it's earnings.

Nickel price has come off probably 10000$ per tone in the meantime.

I will leave the conclusion to you guys.

Taking the metal prices the past few months, I simply could not justify in my own mind BHP at close to $48, China or no China.
 
Re: XAO Analysis

It can only get worse ...

Why is everyone so convinced with China ?

Average Chinaman earns 2pc of average American. They say 3 cents out of every 1 dollar Americans spend on Chinese goods actually makes it back to China.

They are not going to plug the short fall of a Recessionary US, they have their own asset bubbles, Internal Debt and Inflation problems etc.

Too many are maxed out on Debt, the ultimate fundamental.

Decoupling doesnt exist, it might oneday, but not till after a big downturn and reshuffle.

Companies are still priced on old Growth.

I cant see any good/growth news, can any of you ?

Thought I might add, My house is already full to the brim with cheap Chinese Junk, is yours too ? I bet the average American already has his fair share of Cheap goodies too, maybe we really are already saturated with cheap toys to boot, reducing demand going forward ?
 
Re: XAO Analysis

From last weekend.
Whiskers said:
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.
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Keep your shirts on people! It's gonna be all right. :)

Vertical line is roughly where I reckon we are compared to June 06 and August 07.

The worst is over for us. :eek: (Bludy hell I hope so now I've said that)
 

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Re: XAO Analysis

Whiskers said:
From last weekend.


Keep your shirts on people! It's gonna be all right. :)

Vertical line is roughly where I reckon we are compared to June 06 and August 07.

The worst is over for us. :eek: (Bludy hell I hope so now I've said that)
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Looks to me as if it wants to retest that low. That looked like a classic counter rally. You will want to see that low hold.

cheers
 
Re: XAO Analysis

Sincerely hoping for the prediction of the worst being over to be right!:)

I'm not claiming that the chart below is anything other than a simplistic look at one piece of overall market behaviour, but it might be helpful for those looking for re-entry. While the chart is for the DJIA, the XAO is showing a similar pattern.

The psychological obstacles of
1. the recent years bull run giving the feeling that we might have gotten ahead of ourselves, and
2. continual battering from sub-prime and fear of US recession,

these just won't seem to go away. What can turn this all around in the short term? Some good company results announcements would help, but I fear we are just going to have to wait for the turmoil in the US financial system to play out.
 

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Re: XAO Analysis

Logique said:
Sincerely hoping for the prediction of the worst being over to be right!:)
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I feel that there are a lot of Ninja turtle eggs starting to hatch in the European institutions cellars, and although most of them will be on the smallish side, combined they may provide the makings of the next omlette.
A lot of monolines in the US are worrying more about whether the eggs they have been sitting on are actually rotten, and...aahhh. what the kell.. bargains everywhere.. I'm off to fill me boots..
Cheers
.........Kauri
 
Re: XAO Analysis

Still more cockroaches to come I think, after that plague and pestilence mind you I would swap all of that for the mossies at my place currently.

Looking at the chart its still pointing down wards IMHO
 

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Re: XAO Analysis

IFocus said:
Still more cockroaches to come I think, after that plague and pestilence mind you I would swap all of that for the mossies at my place currently.

Looking at the chart its still pointing down wards IMHO
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IFocus, I like your work. You don't need a chart out to 1987 to read this market, your comments on that day action is spot on IMO. Lots of people are pulling up weekly and long term charts back to 1987!. When I bet they don't normally trade off them. (if you do fine)

People often talk about lack of discipline in trading in relation to not sticking to their plans. Wonder what people think about making a major shift from one time frame to another. Part of normal analysis or lack of confidence in their normal system?
 
Re: XAO Analysis

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.----------Whiskers.
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certain types of volatility cluster belong to certain types of trader
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Because each price depends to some extent on the previous price, the market is not a random walk
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any free market situation will have a drift exponent ( A trend constant
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But...

But time is dynamic and a measure of time is needed which will stretch and contract as the ( dynamics of the )system changes.

"Time eats things" .

You have to define time dynamically
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That is either from a 1926 text on P&F
or From the work at http://www.olsen.ch/...

It is hard to say:).. because they are the same..

Note the trend constant since 1982 !

CHAOS IS SEASONAL
Certain events appear to occur in an irregular sequence of
nonrepeating patterns. Such a picture, which corresponds to
the scientific notion of chaos, may seem to be useless in preparing
for the future. But chaos in the stock market, as in
business and many other areas, appears to be seasonal. In
particular, chaos is associated with periods of stagnation.
Once a trend enters a high-growth season, fluctuations become
less significant. Moreover, rapid-change seasons
alternate with stagnating seasons, implying that chaos eventually
leads to order, and vice versa. There is symmetry in this swing
from chaos to order and back, which can be utilized in making
investment decisions.
MAKING INVESTMENTS
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This is either from 1931 or by Theodore Modis :)


It is How much not how long
It is not random walks it is

"Followings"

clustering
seasons and cycles

But make sure Time does not eat you

Had to make the chart small to fit the context

A random Walk ?

motorway
 

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Re: XAO Analysis

In 1930 and 1955 the American share market (Dow) was at the same value, after 25 years.
In 1965 and 1982 the American share market (Dow) was almost the same value after 17 years.

From the Dow's high in (1929 at 330) to (2007 at 14000) the American market has increased by 5% compounding over 78 years.

However the market in 1929 was so over priced that 3 years later the Dow dropped by 87% from approx' 330 to 43.

From 1932 (the low at 43) to 2007's high the Dow had increased 9% compounding over 75 years.

From 1982 to 2007's high the Dow had increased 12% compounding over 25 years.
From 1982 to 2003 the Dow had increased by 11.5% compounding over 21 years.
From 2003 to 2007's high the Dow had increased 13% compounding over 4 years.

Australia (XAO / All-Ords)
From 1982 to 2007's high the XAO had increased 11% compounding over 25 years.
From 1982 to 2003 the XAO had increased by 10% compounding over 21 years.
From 2003 to 2007's high the XAO had increased 22% compounding over 4 years.

If we had another 22% rise in Australia in 2008 and the Dow had no growth, this would bring us in line with the Dow's 1982 to 2007 figure of 12% compounding as above.

My guess is that mining in Australia from the likes of BHP over the past 5 years has only added a few percent to that 22% compounding figure above. For example both CBA and WOW both have increased 20 odd percent compounding over the past 5 years.

dow.png
dow2.png

So the over all market was flat for 20 years, then raised for 15 years, then went flat for 15 years and raised again for 25 years.

What next? Just thinking out loud and tring to work out what I am going to do...


I don't feel safe with my superannuation in shares over the next 10-20 years! I guess alot of people just added to their share super'. Hmmmm
Look out The Debt Bubble.....

Whats with the increase with volumes over the last 8 years?
 
Re: XAO Analysis

Interesting post Mr and numbercruncher.

How much of that debt growth in Australia do you attribute to the out of control income/house price ratio? But your right, a slowdown in growth will lead to serious troubles!

Like the US used to think debt was managable and not a bad thing if the economy kept growing. This is what was taught to me in Uni several years ago! Funny how most things taught are then re-written just a few years later!
 
Re: XAO Analysis

motorway said:
A random Walk ?
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I think only to the extent of emotional excesses... ie the time for each lesson to be learnt (and enacted) before the next step/cycle can begin.

But then 'probability' can narrow the trajectory a lot.
 
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