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XAO Technical Analysis

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Re: XAO Analysis


Stick with the trend I say!

Keep the banks shorted and the precious metals and base metals long!

Set tight stops. Once the trend changes, get out and look for the next market/sector movement.

Thats my method at least. Pretty simple, but very effective so far.

See how we go, dont want to get too far ahead of myself and end up with my fingers burnt!

Its this, or CASH! Only two ways I see profitable in this market.
 
Re: XAO Analysis

tex.willer said:
The laws of gravity applies even to the stock market ... With the fuel gone (cheap debt), so has the bull run.

Has anyone actually had a look at a weekly or monthly chart of XJO?
Click to expand...

You bet. Although I look at the XAO...it's an XAO thread after all. Will mark up a chart and post it late on...time for work!

ASX.G
 
Re: XAO Analysis

tex.willer said:
When ( not if ) the commodities bubble bursts, we will find out the true low of the market ...
Click to expand...

Couldn't agree more. At the moment we have see a flight to commodities for cover, whaich has atrificially stabilised the quality stocks in the sector. It would be an interesting calculation to put the big two back at their Dec/Jan 07 levels of BHP $25 and RIO at $65 with their current weighting of the XAO index and see what number spits out. I had a rough stab at it and I'm no professional but the number is aprox 4570. Any thoughts. Another methodology woulld be to take the two back to a forward P/E Ratio of 9 (which has provided good support in the past) and calculate the price and from there weight it against the effect of the XAO. Am I on the right track?


Cheers



BT
 
Re: XAO Analysis

MRC & Co said:
Stick with the trend I say!

Keep the banks shorted and the precious metals and base metals long!

Set tight stops. Once the trend changes, get out and look for the next market/sector movement.
Click to expand...

Looks like the trend has started to change :
Last night US market, green lights on:

Financials up 0.3%, Regional Banking up 1.94%, REIT up 1.7%.

Red lights on:

Materials, Energy, Gold Mining shares dropped between -2-4%.
BHP/RIO dropped -3.2%
DBA (Soft commodities ETF) -4%
 
Re: XAO Analysis

tex.willer said:
1 day doesn't constitute a trend change ...
Click to expand...

Absolutely.

But it was weird to see the banks rally! Still, base metals held up queit well and the POG remained relatively stable. Was set for a slowdown anyways after its recent run. Next time it runs, 1000 is being cracked!
 
Re: XAO Analysis

From what I have learnt from trading in the last 2.4 years is never call a spoon a spoon! as bad as something looks, is this right am I really looking at this picture from all angles??

From glancing at the 1day 5 year chart it's as plain as day we are more then correcting it sure looks like a bear market!

But I hate to be set in a direction cuz whenever I am it goes the other way!

What I can see on the 1 day 1 year is a descending triangle (bear cont pattern) broken with more down side to come Monday, the last support/cluttered counter rally area looks a lot like the one circled last year. Is this a set up to the last thrust lower? I will go out on a limb and say we could put in a new low. The spi did have a end of session rally that may hold it up a tad. I am no expert on using the spi to predict the xjo or xao so don't quote me.

cheers
Joseph
 

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Re: XAO Analysis

Posting a Chart of the XMJ

Some may have noticed that RIO and BHP broke through support today....

Chart has ominous implications for XAO IMHO
 

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Re: XAO Analysis

Trembling Hand said:
Don't mention the miners and down in the same sentence. :behead:
Click to expand...

ha ha, yeh, technically, the miners are looking very very shaky! Overnight will determine if this was just a whipsaw.

Fundamentally, cant see anywhere else anybody would want to place their money......?
 
Re: XAO Analysis

MRC & Co said:
ha ha, yeh, technically, the miners are looking very very shaky! Overnight will determine if this was just a whipsaw.

Fundamentally, cant see anywhere else anybody would want to place their money......?
Click to expand...

Agree its still an each way bet technically. You could argue that they have put in a couple of lower highs since Nov 07(which is a down trend) but equally this could turn out to be a higher low since mid Jan (up trend)
 
Re: XAO Analysis

Trembling Hand said:
Agree its still an each way bet technically. You could argue that they have put in a couple of lower highs since Nov 07(which is a down trend) but equally this could turn out to be a higher low since mid Jan (up trend)
Click to expand...

Yeh, though in this instance, I would be inclined to look at intermarket analysis. Downtrend in this current market is not an overly bad sign. XMJ is based on equities afterall, needs comparison to both underlying material prices and broader index movements.
 
Re: XAO Analysis

MRC & Co said:
ha ha, yeh, technically, the miners are looking very very shaky! Overnight will determine if this was just a whipsaw.

Fundamentally, cant see anywhere else anybody would want to place their money......?
Click to expand...

Well, that's a little silly (unless you're referring to placing within the market)

There seems to almost be a sentiment that the stock market is a must, & that one must always, & forever have stock market exposure ... which just isn't so :

People can place their money in term deposits, & high interest accounts over the short / medium term. One should not rely on commodities being the only "safe" place left to invest in ... commodities could very well turn sour as well. All that's needed is a catalyst; evidence that China is slowing down - or any other number of things.

Commodities are artificially inflated by speculation, in my opinion. Traders, buying in to hedge against inflation, & the undying hope / faith in China. If that 'hot money' suddenly disappears, commodities will be left to be priced based on actual demand; & if it turns out, that there is indeed a slow down ... well, seems pretty obvious to me.

Seems to me, that commodities are also staying afloat based on disruptions (as a result of power shortages), & not a mass of increased demand; which also represents further speculation. The theory of further disruptions to these mines, & once again, what if this doesn't pan out?

I, basically have no faith in any sector of this market at the moment; & believe we have much further to fall in the course of this year, especially if the undying enthusiasm of this commodities bull-uble (being cheeky) finally dies.
 
Re: XAO Analysis

Trembling Hand said:
Agree its still an each way bet technically. You could argue that they have put in a couple of lower highs since Nov 07(which is a down trend) but equally this could turn out to be a higher low since mid Jan (up trend)
Click to expand...

Was going to write about this in a bit of depth later.

Further to your calls and those of Ifocus, looks like we are in a short term downtrend within a still clear long term commodities uptrend.

The problem is, even on a dip from here, without breaking the more important lows, it has the potential to fall quite a way, and put a heap of pressure on the XAO.

XMJ
XMM
and
XEJ

provided. XEJ, the energy index, looks the most bearish of the lot.

Cheers.
 

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Re: XAO Analysis

But if we get a run on a local bank, or a major from a western country, the whole thing will change.

Hell, even I'm looking at buying things simply because I don't want all my money in the bank.
 
Re: XAO Analysis


No (you probably gain that sentiment of the stockmarket being a must because you are posting on a stockmarket forum).

Tell someone in the US to put their $$ in term deposits, what happens?

I am not just talking about the stockmarket being a "must". I am talking about commodity markets in general (you can buy the real stuff if you want) which, in turn, are "coincidently" reflected to some degree in our material prices of their related equities.

How much is a short-term deposit paying in the second largest global economy of Japan?

How about property in US or even Australia?

You put your cash in the bank here, I would have made 7% (averaged out, around) since July 1. I have made 24% so far otherwise. Must say, I just cannot accept 3-4% real returns per annum, before tax (even in a bear market). Maybe my risk will bite me in the short-term (though with my stops not too much and certainly nowhere near to wiping out my 24% gain), but I beleive it will pay off in the long-term.

Cheers
 
Re: XAO Analysis

chops_a_must said:
But if we get a run on a local bank, or a major from a western country, the whole thing will change.

Hell, even I'm looking at buying things simply because I don't want all my money in the bank.
Click to expand...

Imagine that, WOW. Last time I recall a run on the banks was in Argentina quiet some time ago now, am I right?

Never could have imagined it happening in a major Western economy and still dont think it will happen. But man would it be a peice of history if it did, they would (and still will) be writing textbooks about this moment for the next generation.........
 
Re: XAO Analysis


Nope. Wrong. Northern Rock.

And I think we will definitely see more. I can't see how we couldn't...
 
Re: XAO Analysis



I do of course appreciate that, but, here in Australia, we do have the exposure to a strong dollar, & an acceptable rate of interest; in short, we're fortunately not the US, or Japan.

Are you a trader, or an investor? If you're a trader, granted - this might be a great time for you. However, an investor might not be having such a great time : I understand that in the long-term the market will most likely bounce back; but, is this going to happen in 1 or 2 days? Most likely not.

All I'm saying, is that the markets aren't going to make up a years worth of profits in a matter of days (& stay there) ... & as an investor, there's really no need to remain in the markets until a new positive trend is established (this, perhaps, especially relates best to less-seasoned investors), which imo is quite a ways off.


& Chops, well - I tend to believe that our banks are very safe. In fact, I read in another thread; something about our top-4 banks being covered by the government? Although, I'm not too sure on how accurate that is.
 
Re: XAO Analysis

chops_a_must said:
Nope. Wrong. Northern Rock.

And I think we will definitely see more. I can't see how we couldn't...
Click to expand...

Yes, however I am talking about a run on the banks (as in a country-wide or perhaps even global in this case) phenomena. I seem to recall television footage in Argentina of lines out the front of banks all over the place.

Something to really get the media buzzing and set fear into the hearts of all of the population. Perhaps this gloom and doom should be in the severe and immiment market correction thread.

Would be a sight I never expected to see!
 
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