XAO Technical Analysis

[korrupt_1]

Re: XAO Analysis

after its first low, it doesnt rally to form a high above the following highs, wouldnt this indicate it is NOT a descending triangle?

hi Buffettology

*scratch head* ... my understanding of a descending triangle is one that forms LOWER HIGHS... yet it bounces off a strong support line (in this case around the 5200-5250 zone) ... a break of this support zone will see much lower prices.

http://www.investopedia.com/terms/d/descendingtriangle.asp

Though I do note that the chart is over a VERY small timeframe.

The time frame is 2 weeks. I guess different traders trade to different time scales. Somes days I trade to monthly charts, others 1 second charts... it all depends i guess.. the price action for the last 2 weeks has been stagnating so I thought a chart for the 2 weeks would be an appropriate analysis of the current situation.

Furthermore, wouldnt resistance be just above 5700 (as opposed to above 5750?).

A reversal of the down trend is what I'm referring to... feb 13 saw it just miss 5750.... also price action on the jan 28/29 saw much congestion around 5700-5750, however a break of 5750 led to higher prices... hence my analysis that a break of 5750 is a SAFER bet for higher prices - not 5700.

In summary, break 5500 on high volume will confirm a descending triangle and lower prices. Alternatively, a break above 5750 will likely see higher prices...


It's fun reading other people's anaylsis... you can read it from all sorts of angles and come up with as many conclusions but still, you end up exactly where you left it - the current price and a bowl of spagehtti

 

[motorway]

Re: XAO Analysis

So what's it telling us motorway? We're trending down?

B% is the calendar..... We are in winter , but the shortest day is probably behind us ( That is the low ),,,But at this part of the curve the volatility will be high and chaos reigns..

Winter is the beginning and the end. Death comes naturally
only in winter. That is why survival becomes the name
of the game. People are anxious, confused, and frustrated,
and explore new directions. During the chaos of the winter
profound changes take place.

But all things are never EQUAL.... people work hard to survive hence consensus projections , projections are Not prospect, they are useless as predictions , are always wrong at extremes....The safe bet is always the end of the world is NOT nigh...

Winter is the most
difficult but also the most fertile season. Despite low morale,
innovation and creativity are at a high.

The whole cycle P&F show all the seasons

ALTERNATING BETWEEN GROWTH AND CHAOS
A naive but illuminating model for the alternation between
order and chaos is the image of an elderly person who with a
shaking hand tries to draw an S-shaped curve. While drawing
the flat early part of the curve, his trembling produces visible
jagged peaks and troughs, but during the sharp upward move
the fluctuations from the trembling become masked by the
well-pronounced trend.

We are in a period of chaos.... The interaction between weak and strong hands causes the "fluctuations"

The B% reached an extreme low ( projecting it would have meant the end of the world or at least a world ) , so a move up was very likely.( look at the previous posts ). ( Postion is Prospect )...
B% ( as said before ) quickly moved to bull alert, bull confirmed and into bull correction....It is moving up after a test....With volume in harmony ( Volume is still high on the down waves though )

That move up from the extreme point was a strong "recoil"
and is consolidating in a sideways extension as demand and supply curves come closer together ( liquidity is building at the bid offer spread after it had ''vanished" )

I still want to see the B% move to 50% ( That could happen very quickly because the point of resistance is lower eg BHP is not above that point, but very close to it now )

I want to see the volume subside on any down waves...

A classic use of the B% reading at present is to buy strong relative strength stocks and those with very clear ending action already confirmed ( those stocks leading the waves ) and/or tighter risk management ..

Depends also on your time horizon too

Turbulent markets occur at cycle extremes when, as a result of offsetting cycles, StrongHands and WeakHands are at cross-purposes.

How strong are Your HANDS ?

This is also another way of stating Position Vs Projection..
strong hands are buying from a strong position
weak hands are selling on scary projections

The higher volume suggests some more sideways
with bias to moves UP

USA is not Japan.... the USA will quickly find another bubble to get excited about..

Interesting article in the Fin Review on that point..

Every upward or downward swing in the market, whether it amounts to many points, only a few points, or fractions of a point, consists of
numerous buying and selling waves. These have a certain duration;
they run just so long as they can attract a following. When this
following is exhausted for the time being, that wave comes to an end
and a contrary wave sets in. The latter may attract more of a
following than the former. By studying the relationships between
these upward and downward waves, their duration, speed and extent,
and comparing them with each other, we are able to judge the
relative strength of the bulls and the bears as the price movement
progresses.
When you are looking for an opportunity to buy, watch for the DOWN
waves in the market

Richard Wyckoff

There is only the P,V,T & Position -------of those waves !
look at the large Scale P&F
Just get in harmony with those seasons

It is still Winter ... sitting on the sidelines is OK.
But not too long ... because the explosive growth comes in spring.
In Winter the hard work is being done ( The future stars ).


The earlier quotes are from Theodore Modis , AN S-SHAPED TRAIL
TO WALL STREET ...

So what's it telling us motorway? We're trending down?

whatever it is telling us....It is a test and then we see the response..

Poor response then , that tighter risk management comes into play...

It is a study of responses ( the green writing )

I think We have seen the low atm...


For Discussion only

motorway

 

[korrupt_1]

Re: XAO Analysis

Interesting read Motorway...

I had to read it about 5 times to understand

Can I summerise? You are saying that the worse has passed? But we're still in for a bit of dark gloomy winter days still? however, just be ready for some explosive rallies to higher prices?(ie the coming of spring.)

If the worse has passed, and the low has been made (or the shortest day), then does that mean we can expect to be in a bull market again very soon?

What line of analysis is that where you compare stock markets to the season? I've never heard of this before until now?

 

[Buffettology]

Re: XAO Analysis

It's fun reading other people's anaylsis... you can read it from all sorts of angles and come up with as many conclusions but still, you end up exactly where you left it - the current price and a bowl of spagehtti

ha ha, very true.

Just something to think about:

"Upper Descending Trend Line: At least two reaction highs are required to form the upper descending trend line. These reaction highs should be successively lower and there should be some distance between the highs. If a more recent reaction high is equal to or greater than the previous reaction high, then the descending triangle is not valid."

Note the last scentence, in your graph, there appears to be a reaction high that is LOWER than the final two that follow.....though, there are two reaction highs at the end of the charting period, which alone can be used. However, not sure if the timeframe is long enough.........


"Duration: The length of the pattern can range from a few weeks to many months, with the average pattern lasting from 1-3 months."

As you say, the lows are higher also, so I just dont think its a very strong signal at the moment, but thats most definately just in my humble opinion.

Cheers

 

[motorway]

Re: XAO Analysis

Interesting read Motorway...

I had to read it about 5 times to understand

Can I summerise? You are saying that the worse has passed? But we're still in for a bit of dark gloomy winter days still? however, just be ready for some explosive rallies to higher prices?(ie the coming of spring.)

If the worse has passed, and the low has been made (or the shortest day), then does that mean we can expect to be in a bull market again very soon?

What line of analysis is that where you compare stock markets to the season? I've never heard of this before until now?

There are seasons to everything
minds think in straight lines to their peril

again Position Vs Projection

There are four phases of a market campaign...

A B% chart is a type of chart called a "trend barometer"

( wyckoff devolped his in 1916 )

It is the divergence between it and the other "qualities" that make it useful .

In the old times on the shortest day of the year .. There was a solstice festival to remind everyone that the "good times" were soon to come back

else people would panic as if the trend would continue ( thinking in straight lines )... however You could only have a festival if you had a calendar, a barometer....


some more from Modis

I have divided the natural-growth cycle into segments and
used the four seasons as a metaphor. Winter reflects the critical-
growth period encountered during the beginning and the
end of a natural-growth process.

Products experience two winters in their lifetime. The first while they are struggling for a foothold in the marketplace, and the second while they
are exiting and the follow-up product is fighting for the succession.
By definition, the end of winter signals that the
growth process has survived “infant mortality,” that is, it has
realized approximately 7 percent of its growth potential.

The seasons metaphor is not used for poetic reasons. The
advantage over more traditional segmentations is that our
familiarity with images and mechanisms associated with nature’s
four seasons can shed light and guide us through
decision-making processes about business issues and other
social endeavors.

For example, the low creativity observed
during a summer is only partially due to the heat in the
weather. New undertakings are mainly disfavored because
the living is easy and there is no reason to look for change.

In contrast, animals (such as foxes and sparrows) are known to
become entrepreneurial in the winter. There is wisdom encoded
in nature’s seasonal patterns and behaviors. One can
study and transfer them to whatever situation depicts a succession
of season-like stages.

It is conceivable to exploit this
analogy all the way down to monthly behaviors.
Like the four seasons, the segments into which we divide
the growth cycle must be of equal length. The time scale
may vary widely depending on what growth process we are
examining.

For a product, a season’s length may be six
months to a year. For an industry, it may be five to ten tears.
For the world economy cycling through fifty-to-sixty-year
waves, it may be fifteen years long. For a “craze” in the stock
market, a season may be as short as one hour.

Old age wisdom. All new again.....

Accumulation, Markup, Distribution, Markdown

Seasons.....

The only thing causing me to be cautious is the short time we have been in winter..... Yet the P&F says enough "work" has be done

But remember the shortest day is not the end of winter it is only in the first third..

Important point!



motorway

 

[chops_a_must]

Re: XAO Analysis

It's winter is it?

Geez... I could have sworn it was otherwise. Must be all that linear thinking.

 

[CFD]

Re: XAO Analysis

I always think what a great shame it is when someone of far greater knowledge and understanding than mine goes to such time and effort to explain their views, only to be met by curt one liners.

 

[lioness]

Re: XAO Analysis

Chops, you would be better off trying to learn from motorway, rather than displaying your sarcasm. Please refrain from those cheap one liners, they are putting the whole forum off.


:microwave

 

[chops_a_must]

Re: XAO Analysis

I always think what a great shame it is when someone of far greater knowledge and understanding than mine goes to such time and effort to explain their views, only to be met by curt one liners.

It is after all the XAO analysis thread, yet a seasonal analysis and winter solstice is used as a point of reference. I do not know whether different types of seasonal analysis works, but have read you are much better off buying into the aus market after october, and selling in may, historically.

And I especially have a problem with using a winter solstice as a reference point, because after all, it is the summer solstice somewhere else. So couldn't "winter" analysis be the same as "summer" analysis? So any comparisons between the two extremes are thus nullified and void.

If P&F shows all of the seasons, does it show Autumn, Spring, Winter, Summer all at the same time, and all at the same time as hot and wet, and cool and dry?

 

[Whiskers]

Re: XAO Analysis



Chops the seasons are used metaphorically to relate the rythem of the market. It has no relation to the natural seasons, especially not time wise.

PS:

cycles of the market is probably a better word.

 

[Porper]

Re: XAO Analysis

I always think what a great shame it is when someone of far greater knowledge and understanding than mine goes to such time and effort to explain their views, only to be met by curt one liners.

When people don't understand something they either ignore it, ridicule it or try and be clever.

Other people just like the sound of their own voice.

I am sure a lot of us don't understand all of Motorways posts, but the effort and knowledge he has is second to none on here, and if we can take a little bit on board each time it has to be good.

 

[chops_a_must]

Re: XAO Analysis

Chops the seasons are used metaphorically to relate the rythem of the market. It has no relation to the natural seasons, especially not time wise.

I know that whiskers.

I was just trying to convey that one person's summer is another's winter etc. etc.

I just have a personal gripe with post-modernist metaphorical and analogous argument constructs, because far from being opposed to linear thought as proposed above, they hide cognitive bias. Which can be seen in the argument, "there are four phases of a market campaign", and there are also four seasons, so we equate them. But we know there are not 4 seasons, depending on where you live. So the bias there is quite obvious.

Just for fun.

Cheers.

 

[motorway]

Re: XAO Analysis

I was just trying to convey that one person's summer is another's winter etc. etc.

Ask Centro shareholders if it's winter ( or tricom etc margin loans ! credit bubble ) the signs of Winter are everywhere..

Winter is winter... I gave a definition in the post

It does not matter what someone thinks (post-modernist metaphorical and analogous argument constructs )

Winter is still winter

I defined it thus

Winter is the beginning and the end. Death comes naturally
only in winter. That is why survival becomes the name
of the game.

when the B% hit 6.6% and then volume surged

The difference between those stuck or trapped in a linear mode
and those not was very clear


Just as winter is a reality
so is accumulation ..
You can think what you like (post-modernist metaphorical and analogous argument constructs )... But that won't change a thing

one thing that has struck me as I have posted the B% ( since the August correction) is how real and useful it has been...

The seasons are a useful analogy as Modis states

The seasons metaphor is not used for poetic reasons. The
advantage over more traditional segmentations is that our
familiarity with images and mechanisms associated with nature’s
four seasons can shed light and guide us through
decision-making processes about business issues and other
social endeavors.

A definition of the real is what works
pretending winter is summer
does not work

The B% is objective It does not matter what you think

If it is 6.6% and volume surges and prices move up
that is a useful measure of reality..

For those who were selling it did not matter what they thought..

Real things are like that..


I think Theodore Modis would laugh about being equated to post-modernist metaphorical and analogous argument constructs ...


motorway

 

[theasxgorilla]

Re: XAO Analysis

The safe bet is always the end of the world is NOT nigh...

USA is not Japan.... the USA will quickly find another bubble to get excited about..

Interesting article in the Fin Review on that point..

For Discussion only

Couldn't agree more on both counts. Can't help but get the feeling that we're just waiting for a WorldCom and an Enron, and then a long enough period of time for the global finance players to find new opportunities and start trusting one another once again, and then we're off again.

Will we see another low before that time arrives? If I cast my eye back to the softer patches in the history of the XAO, even when it's bearish it tends to bounce along, as opposed to utterly falling out of bed. You could be right...for the short to medium term that most recent low may remain in place.

Thanks ever so much for some sobering analysis.

ASX.G

 

[theasxgorilla]

Re: XAO Analysis

Treefrog has posted up some information regarding Market Indicators, in particular the B% covered by Motorway here. To give discussion of these indicators the focus they ultimately require, and to preserve the flow of discussion on the XAO thread I've given them a new thread here:

https://www.aussiestockforums.com/forums/showthread.php?t=9957

Thanks,

ASX.G

 

[treefrog]

Re: XAO Analysis

Treefrog has posted up some information regarding Market Indicators, in particular the B% covered by Motorway here. To give discussion of these indicators the focus they ultimately require, and to preserve the flow of discussion on the XAO thread I've given them a new thread here:

https://www.aussiestockforums.com/forums/showthread.php?t=9957

Thanks,

ASX.G

A bit disappointing you bumped those ASX.G - posted them here because I think most following this thread were hard put to readilly understand what motorway is going on about and some clarification in plain speak was needed

 

[austek]

Re: XAO Analysis

Don't feel disappointed tree frog, those of us who need clarification perhaps 99% of us, are quite capable of clicking over to the thread .

I for one appreciate the clear & precise explanation given, and will reread motorways comments to see if we get some hint of where this places the ASX
right now.

The more skilled traders in this Country seem to be evenly divided of whether our market is bullish still or the bear market has started.

Even if we are not in a bear market right now, we must be on the verge.

 

[austek]

Re: XAO Analysis

Meant to say, the skinny ledge forming on the XAO is making me nervous.
Although I am trading still this market as a bear market rally.

 

[korrupt_1]

Re: XAO Analysis

wow... almost perfect range trading! look at it bounce off the trend lines!

Symetrical triangle forming... where will it go next?

Was disappointed that it didnt go higher than 5700 this morning. That would have been a good sign that bears are coming back....

I'm not able to get volume information. Anyone able to post a chart with volume? (I assume volume is very low)

Oh well... lets see where things go tonight... it's all up to the American's tonight... I might put a spec buy at 5550... with stop loss @ 50pts and targets at maybe 200pts (1:4 risk/reward )

 

[MRC & Co]

Re: XAO Analysis

Sure does look like it Korrupt!

I have no volume either, my chart says the exchange provides no volume data.

Either way the apex is mighty close and it appears past the 75% point already, obviously, it has to break one way or the other very soon!

However, its estimated 75% break in line with the previous trend, so a downward breakdown looks more probable! Not sure if that is a good thing or a bad thing at this present point!

But like you say, the US overnight is going to be the driving force, but if it goes up a reasonable amount, I think tomorrow we might get an upside breakout!

And you mean if it broke 5700, a good sign the bulls are coming back?