XAO Technical Analysis

[korrupt_1]

Re: XAO Analysis

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

hehe.. sorry, the bulls are back in town if it broke 5700... but when 5850 is broken, i'd say the heard of bulls are back

However, its estimated 75% break in line with the previous trend

Also, I read in some text that the stronger the support line, in this case 5500-5550, the more explosive the break will be when it does go lower.

Yikes... could this be the beginning of what some here have been expecting as the 4700's as the ultimate low? I say... BRING IT ON AND GET IT OVER AND DONE WITH, so we can go back to 'NORMAL' (whatever that is)

 

[MRC & Co]

Re: XAO Analysis

I actually think we are more likely to see an upward breakout if anything (but as we already said, a lot comes down to the US overnight). But hey, just my opinion.

Good luck!

 

[Kauri]

Re: XAO Analysis

some more possible bank news from tother side may have an affect/effect?? I thunk..
check out gold and the yen swaps... risk aversion??
Cheers
..........Kauri

 

[treefrog]

Re: XAO Analysis

The current market correction should be viewed relevant to the significant size and haste of the move itself.
Enthusiasm for the return of the bull market is premature: just look at the weakness in the bull's weekly efforts since Nov 07. Of course there will be UPward blips - even significant exhaustion breaks.
Taking the weekly over the last 15 years and applying the linear regression line over the last 10 and last 15, we are sitting on the 10 now (ie where we should be taking into account all the price action of those 10yrs) with the last few weeks telling me obviously more downside coming to return us to the 15yr LR line
And as the market is prone to over react, I love the confluence of the 10yr 50%fib with the 38%fib of the 15yr and reackon if the teddybears' picnic continues we will see at least a significant bounce from that (ie the 4800 level).
PS Y axis log scale irrelevant to both fib levels and linear regression lines

 

[korrupt_1]

Re: XAO Analysis

I guess there are two lines of thought to help us through this fog of war with the SPI... Technicals or Fundamentals.

I agree that Technicals say that 4700's is a real possibility in this current market shake up, however, going by Fundamentals, in the last few weeks, there has been some real big bomb shells dropped that had this news broken in Nov/Dec 07, it would have seen the SPI drop significantly more - however, the market's reaction to this news has been mild and almost expected.

I'm wondering what level of Fundamental news would it take for the SPI to dump from 5600 to 4700's (900 points!!)? The US confirms that it's in a recession?

 

[treefrog]

Re: XAO Analysis

I guess there are two lines of thought to help us through this fog of war with the SPI... Technicals or Fundamentals.

I agree that Technicals say that 4700's is a real possibility in this current market shake up, however, going by Fundamentals, in the last few weeks, there has been some real big bomb shells dropped that had this news broken in Nov/Dec 07, it would have seen the SPI drop significantly more - however, the market's reaction to this news has been mild and almost expected.

I'm wondering what level of Fundamental news would it take for the SPI to dump from 5600 to 4700's (900 points!!)? The US confirms that it's in a recession?

wonders how many fundamentalists are factoring in the $A rise to parity - can't say I've noticed a lot of co's adjusting their forecasts for it - they simply have not / did not accept it was happening.
Many forecasts still appear based on the US$/$A exchange of 76c so future earnings may need to be adjusted up to 20% for some.
Of course, all co's are affected differently by the exchange rate changes - some even benefiting

 

[motorway]

Re: XAO Analysis

(ie where we should be taking into account all the price action of those 10yrs) with the last few weeks telling me obviously more downside coming to return us to the 15yr LR line
And as the market is prone to over react

Why should we be ?

The move since 2003....

Has it been the increase in stock prices that has led people to believe there is a commodity boom ( and hence the move is a bubble that will burst and take prices back down to "where we should be" eg like the tech bubble)

Or has there been a "real fundamental" shift , a real commodity boom that is underpinning the positive sentiment
and so the price rises since 2003 have been warranted .

the market is prone to over react

true .. But what is the real action and what is the (over ) reaction..

Depends on time scale.... ... But I think on time Scales that matter to investors ..

It is the current reaction that is the over reaction...........

This is esp the case with the XAO. I think other markets are differently placed.


bubble dynamics are often in play when prices grow greater than at an exponential rate ( so you see log charts that look like arithmetic charts usually do )................

I think our market is naturally caught up in a bit of contagion ..
It stopped going up and that always catches people out so a bit of unwinding..

But there is no bubble to burst..only some resting and a bit of a step back ( Which is not good if you have very large margin loan etc )

No Bubble is an important point..




Thoughts for discussion

motorway

 

[Whiskers]

Re: XAO Analysis

The current market correction should be viewed relevant to the significant size and haste of the move itself.

Gee treefrog, for a moment I thought you got my notion of 'proportion' that I mentioned a few weeks ago to allay fears of any similarities to 87 etc... but not quite.

I agree that Technicals say that 4700's is a real possibility in this current market shake up, however, going by Fundamentals, in the last few weeks, there has been some real big bomb shells dropped that had this news broken in Nov/Dec 07, it would have seen the SPI drop significantly more - however, the market's reaction to this news has been mild and almost expected.

I'm in agreement there korrupt, it will take some shocking news to cause a big drop. I reckon a short mild resession is pretty much factored in.

I like wavepickers point in the EW thread that first of all it's important to try to get a feel of the general trend and for me that includes a feel for the underlying value of the market.

Motorway, we use different tools, but so far I can't fault your commentry.

For me, the XMJ is doing well getting back up there. All we need is a bit of time for the financial to flush out the last of their surprises, cos I think that is what is basically holding our market back... uncertainty about what some companies are prepared to disclose. That will probably come with the march qtr reports.

 

[IFocus]

Re: XAO Analysis

XAO closed on it low, volume not giving to much away but did edge up a bit, seems plenty of price rises for resources could not hold the market up. I think we will move down from here.

Tomorrow looking to me to follow though down... but we are still in the buy zone from 31-01-08 so a bounce wouldn't surprise.

Seeez where the stock for a each way bet?

Focus

 

[treefrog]

Re: XAO Analysis

Gee treefrog, for a moment I thought you got my notion of 'proportion' that I mentioned a few weeks ago to allay fears of any similarities to 87 etc... but not quite.

hmmmmm, sarcastic and quoting out of context - not sure I understand your purpose whiskers, but then maybe its the blinkers you have on that limits your perspective

 

[Whiskers]

Re: XAO Analysis

hmmmmm, sarcastic and quoting out of context - not sure I understand your purpose whiskers, but then maybe its the blinkers you have on that limits your perspective

Not sarcastic at all, treefrog. Simply mentioning that for a moment, from your first line, I thought we might be on the same wave length re proportion, ie the extent of the market move relative to where it was. But as I read on... not quite, ie my interpretation of proportion, although it does include fibonacci, in the larger picture for 'proportion' analysis it is only in the early part of my analysis and in different context that you use and I use deviation rather than regression lines which according to my analysis puts the XAO just above the 50% fib retracement from the 4th Feb high which 'coincidently is also just below the long term (18 yr) standard deviation line on the log chart.

Not sarcasm or critism, just different methodology.

 

[korrupt_1]

Re: XAO Analysis

Geeze... what a night of sheer panic and excitiment!

since the compression of the trading range, one would had to have a guess at which way it would break... up was what most of us were hoping for... but Technicals said down was the more likely scenario... (ie symetrical triangle formation, price will break in the direction of the larger trend - in this case down)

But then.... after the dumping... RSI levels we're low and one would have speculated a bounce of some sort...

I'd always say... TRUST THE TECHNICALS and GO WITH THE TREND!!

 

[motorway]

Re: XAO Analysis

Geeze... what a night of sheer panic and excitiment!

since the compression of the trading range, one would had to have a guess at which way it would break... up was what most of us were hoping for... but Technicals said down was the more likely scenario... (ie symetrical triangle formation, price will break in the direction of the larger trend - in this case down)

But then.... after the dumping... RSI levels we're low and one would have speculated a bounce of some sort...

I'd always say... TRUST THE TECHNICALS and GO WITH THE TREND!!

And the Volume ?

Where is the highest Volume on the chart ?
What was the result ?

is the trend really down ? atm

motorway

 

[korrupt_1]

Re: XAO Analysis

And the Volume ?

You are absolutely right... Price movement WITHOUT volume don't mean squat... only MOVEMNT + VOLUME will provide good indication of the market's sentiments...

So my next question.... where do you get volume information from? My provider (IG Markets) doesn't have that information.

 

[treefrog]

Re: XAO Analysis

All this talk of a market crash is truely mad. The market hasnt been this cheap in 18 years. The PE 's are below the long term average and if im not mistaken through out history sharemarket crashes occur when PEs are in their high 20's to 30's. World markets seem to have fallen more than the US markets where all the problems are coming from. People should just get over it, so what if the US slows down. The 97 asian financial crisis had a bigger impact to Australia and yet we were able to pull through.

rules 1-10 in trading any timeframe ken
never let emotion get in the way of "seeing" what is actually happening and trade accordingly as the market is never wrong - irrational, stupid, etc etc but never wrong, and that is because the market is judge jury and executioner

I head much the same said about the Oz banks several weeks ago - and at the same time the observation that Oz banks didn't know how much they were exposed to the US mess: "but not much" was the banks response.
recent announcements by the banks that they are exposed "but not directly very much" have been dribbling out since and will I suspect for a few months yet

 

[gfresh]

Re: XAO Analysis

2pm swan dive again..

co-incidence? doubt it...

 

[treefrog]

Re: XAO Analysis

still rangebound but some nice runs as the mini bulls battle the mini bears

 

[MRC & Co]

Re: XAO Analysis

Geeze... what a night of sheer panic and excitiment!

since the compression of the trading range, one would had to have a guess at which way it would break... up was what most of us were hoping for... but Technicals said down was the more likely scenario... (ie symetrical triangle formation, price will break in the direction of the larger trend - in this case down)

But then.... after the dumping... RSI levels we're low and one would have speculated a bounce of some sort...

I'd always say... TRUST THE TECHNICALS and GO WITH THE TREND!!

Yeh, this is just craziness hey!

You know what is really starting to FUKC me off, is that it doesnt matter if you look at individual stock trends, the XAO trend or what, when it comes down too it, its probably better to study the trends of the US index ATM! Just when it looks like its gonna breakout, the US falls, then as it looks like its gonna breakdown, the US rises!

Lot of information to take into account at the moment, which really makes it very hard indeed, if not impossible and throws my philosophy of "keeping it simple" out the window!

All I can take from this is one should have been: Going long on gold equities which reflect the underlying commodity and shorting the sh*t out of the banks! Only real things to do when the market hits such instability (due to a credit crunch) and inflation rises!

Really hard to make sense of much at the moment!

 

[josjes]

Re: XAO Analysis

Yes, study the trend of DOW and FTSE. Where they lead we follow. At the moment, market is basically being driven by one factor. The fate of the Monoline Insurers/Bond Insurers, ie. MBIA AMBAC and the like.
Where these company shares price lead, Financial follows. Where financial leads, the whole market follows. Last night MBIA closed up 4%. So it looks like market is placing bet that short term wise, there will be satisfactory solution at least. I will place my 'bet' on the market breaking the symmetrical triangle up north and we will get a nice rebound up for at least till mid-March. Until then the market will get a reality hit on the real issue of recession and concerted global growth slow down. Watch out for commodities in mid-March then.

 

[roland]

Re: XAO Analysis

I, for one, declare the market BORING. I've gone from having up to 6 trades a day to 1 a week - if that.

It's as much fun as fishing in a swimming pool...