XAO Technical Analysis

ShareIt · 23 April 2008

Re: XAO Analysis

Uncle Festivus said:
Being a volume tracker TH, can we use the Dow as a close proxy correlation for the XAO? Trying hard to pop without volume support? What would tip the Dow over the resistance? Or is it capitulation time again?

I think we have already broken the resistance on the DOW, but not the S&P... If you look at the DOW, we have an inverted head and shoulders pattern and a break of the neckline. The last day candle is sitting beautifully on this neckline on lighter volume pullback... volume was slightly higher than the previous day, but if you look at the intraday moves, that volume came at the end of the day to take the DOW off the neckline... this inverted head and sholders pattern is very bullish in my opinion and a measurement from the bottom of the head to that neckline sees a run of the DOW up to the 200 MA... all the "smart money" has bought already at the second double bottom (huge volume spikes), so if we see huge spikes in volume on this next way up, I see this as the big boys feeding and to take caution of a possible reversal... but for now it looks like we are going up

ShareIt · 23 April 2008

Re: XAO Analysis

wavepicker said:
Some possible short term weakness for this evening??

I would say that this is a very bullish pattern... an ascending triangle.... although the MACD is slacking off, note that we are not making higher higher's on the XAO at point 3 and 5, so this cancels out a negative divergence so far... perhaps one more pullback to the rising support and then a pop up

tech/a · 23 April 2008

Re: XAO Analysis

In answering TH's question

But have we had accumulation or capitulation or distribution on this drop. And who has been on the other end.

I have perhaps a different way of finding an answer.
Rather than looking at the index I'll have a flick around the main drivers of the index.

BHP,RIO,Banks,WOW, to name a few.
I'll turn their periodicy to WEEKLY.
Flick through 10 or so charts---do you see strength---weakness or flat?

In the Weeklies I'm seeing flat no conviction.

Now flick over to MONTHLY.
What do you see.
I see no conviction,I see weakness.

I see volume but no price increase (Appreciable)
Where there is----BHP as an example I'm seeing it run out of puff.

Little effort.

Trembling Hand · 23 April 2008

Re: XAO Analysis

wavepicker said:
Some possible short term weakness for this evening??

Interestingly wavepicker that pattern looks diff when only using cash data.

Whiskers · 23 April 2008

Re: XAO Analysis

ShareIt said:
I would say that this is a very bullish pattern... an ascending triangle.... although the MACD is slacking off, note that we are not making higher higher's on the XAO at point 3 and 5, so this cancels out a negative divergence so far... perhaps one more pullback to the rising support and then a pop up :2twocents

That's what I was trying to say.

The extra volume coming from a (presumed) FOMC rate cut.

wavepicker · 23 April 2008

Re: XAO Analysis

TH, Whiskers, ShareIt,

I am not sure either, just mulling over the pattern myself. In EW parlance this pattern might be a "leading diagonal" which means it might pullback to the span of wave 2 before heading north again OR if it's a more bullish pattern as ShareIt is talking about it could be a series of nesting 1-2's . The only problem with the bullish case is that the individual drives up are 3 waves which are corrective not impulsive.

TH, my data is not cash data, I would have more faith yours I think.

Looking at the 4 Hr chart, it concurs with the 1hr chart, i.e we get a minor pullback and then the market heads north until it reaches the next cyclical extreme between 5750-5800

ShareIt · 23 April 2008

Re: XAO Analysis

Whiskers said:
That's what I was trying to say.

The extra volume coming from a (presumed) FOMC rate cut.

LOL... sorry, didn't catch you

wavepicker · 23 April 2008

Re: XAO Analysis

Whiskers said:
I find myself agreeing with you again, WP.

I've been thinking we won't kick on too hard until next week after the FOMC meet and probably top out this leg up in early May.

I see you have a 5 there, so if this wave is toppy, how many wavelets (if that is the right term) in a sub wave down can we expect... in a week?

Hello Whiskers, I suspect this would be a short correction perhaps 2-3 days?? One would expected a 3 wave correction.

Refer to chart attached. Cycle point blue 3(shown by red arrow) due any day now.

Cheers

Broadway · 23 April 2008

Re: XAO Analysis

I guess we can all agree we are at a critical point.

Every move up is resisted, and every move down is supported.

The USD index just made a bottom with volume, and the associated currencies have reversed.

Gold and oil will fall now. Oil loves to bounce between the 10's, so will likely fall to $110.

How these events effect the xao, im not sure. But last time the usd made a bottom with good volume was mid march, and we climbed from that fairly well.

Important few days ahead. If we break up we keep going, if we break down we keep going.

ShareIt · 24 April 2008

Re: XAO Analysis

Trembling Hand said:
Whoops!!

OK lets see if I can organize the Big Boyz to make a bang tomorrow.

looks like the big boys have stepped in today, collecting for the next move up

treefrog · 24 April 2008

Re: XAO Analysis

wavepicker said:
.

Looking at the 4 Hr chart, it concurs with the 1hr chart, i.e we get a minor pullback and then the market heads north until it reaches the next cyclical extreme between 5750-5800

hi WP
what indicator are your spagetti lines - something other than EW stuff? curvilinear regression maybe?

wavepicker · 24 April 2008

Re: XAO Analysis

treefrog said:
hi WP
what indicator are your spagetti lines - something other than EW stuff? curvilinear regression maybe?

Hello treefrog, these curvilinear envelopes are something I have been working on for a few years now based on Cyclical Analysis. The blue line is the summation of various cycles established by FFT. The other lines are devations of price about the blue(nominal level) based on historical excursions away form the nominal. When price reaches an extreme, at a minimum it will revert back to the Nominal level(sometimes all the way to the opposite extreme). One can also perform multi timeframe analysis to gauge the significance of the bigger cycles ie look at 4hr chart as well and even daily.

I still am not where I want to be with this tool, it's a long term project and at present just experimenting via trial & error. One thing for sure though, even at this stage in it's development it leave lagging Bollingers for dead!

Last night it was a high probability that we would get a pullback on the 1 hr chart, we got that all the way back to the nominal. The question is though, is the pullback over? Not sure yet it might be, as it has already satisfied the minimum requirements for the short term correction. Need to study further.

I posted these charts because it showed good short term confluence with the the fixed cycle chart in my last post

Cheers

Logique · 2 May 2008

Re: XAO Analysis

We see plenty of gloomy posts in here, I thought I'd post up a chart with some indicators might make a few people feel a bit better.

Who knows, the chart might even play out as bullish divergence. We have seen in recent days plenty of Buy side money out there that can drive markets a long way if the mood changes (21 March 2008).

Bears, are you feeling nervous? I don't mind admitting some nervousness about some shorts. From here its all about follow through, and (please) no more announcement shocks. Wouldn't hurt if oil would go down either. On the whole though, the market seems to be rousing itself.

sassa · 8 May 2008

Re: XAO Analysis

Only one post in the last 2 weeks.Do we declare this thread RIP-rest in peace or remove it promptly.

MRC & Co · 8 May 2008

Re: XAO Analysis

Logique said:
Bears, are you feeling nervous? I don't mind admitting some nervousness about some shorts. From here its all about follow through, and (please) no more announcement shocks. Wouldn't hurt if oil would go down either. On the whole though, the market seems to be rousing itself.

Good post in hindsight.

Oil has gone up and the market still remains robust.

I heard an analyst in the pits of Wall St say last night he thinks the fact that the markets have moved higher despite record oil prices, leads to the assumption that the oil price is in a bubble and the markets will continue to trend higher. Not sure how he came to that conclusion..........

Awesomandy · 8 May 2008

Re: XAO Analysis

MRC & Co said:
Good post in hindsight.

Oil has gone up and the market still remains robust.

I heard an analyst in the pits of Wall St say last night he thinks the fact that the markets have moved higher despite record oil prices, leads to the assumption that the oil price is in a bubble and the markets will continue to trend higher. Not sure how he came to that conclusion..........

I think it's now just a given fact that oil will just keep going up no matter what. It also depends on who you listen to as well. GS estimates that oil will reach $200, while Citigroup estimates that oil will retreat back down to $40. Might as well just put the "ignore" sign up for the time being.

Trembling Hand · 8 May 2008

Re: XAO Analysis

Despite all the noise from the Muppet's there continues to be no evidence that high oil is bad for the stock market

vciscato · 11 May 2008

Re: XAO Analysis

Trembling Hand said:
Despite all the noise from the Muppet's there continues to be no evidence that high oil is bad for the stock market

Hi,
I can't agree with your quote about oil price is not bad for stocks.
The recent falls on the DOW was related mainly from high oil prices. If oil prices remain even at current levels for a sustained amount of time will cause severe inflation and high interest rates. This will no doubt cause stock prices to fall further.

Cgheers,
vic

Trembling Hand · 12 May 2008

Re: XAO Analysis

vciscato said:
I can't agree with your quote about oil price is not bad for stocks.
The recent falls on the DOW was related mainly from high oil prices.

Really? I'm must of been wrong I was sure I was trading a credit crunch. I thought that was pretty clear. Cannot remember even the Muppet's blaming that one on Oil

vciscato said:
If oil prices remain even at current levels for a sustained amount of time will cause severe inflation and high interest rates. This will no doubt cause stock prices to fall further.

Sure high interest rates are bad for stocks BUT if you had that as a starting point for investing (high oil is bad) you wouldn't of been in stocks since 2004 when oil started to break out. You would of missed the best bull market Oz has seen in decades.

In the two charts below of oil going to the moon and the XAO can you tel me which period that oil has been bad for stocks?

SGB · 13 May 2008

Re: XAO Analysis

Food 4 thought!!

XAO Technical Analysis

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