XAO Technical Analysis

MRC & Co · 18 July 2008

Re: XAO Analysis

kennas said:
Since we all know this davo, it must be factored in to the market already right?

But what do we know? How bad is it?

Many knew the financial system was shot long ago, but how many held shorts on the banks the whole way down? Obviously, the carnage that has been seen in recent times, was not 'factored into expectations'.

Sometimes I'm not so sure if you can take anything from market expectations or the fact of whether or not they were 'factored' into price yet. Market takes time to move, so a longer-term situation may take a long time for it to sink in and play out (even though a lot of people can 'see' it coming), and hence we get a sharp, yet gradual move in one direction, with many ebbs and flows along the way.

I mean in hindsight, was it obvious the USD was going to fall? With a financial and housing crisis, Bernake givaways, falling IR's and high inflation? It was almost universally recognised at the time, but few 'realised' this at the time. Still, the USD continues to take a beating.

I know some algo bots are starting to look at 'expectations' and predict price movements based on news releases, will be interesting to know if they have any success.

Expectations are an area that has always baffled me, with absolutely no logical, rhyme nor reason behind them. Bet the bots don't pull any useful data out of their black boxes! Just my bet.

Sean K · 18 July 2008

Re: XAO Analysis

MRC & Co said:
But what do we know? How bad is it?

Yes, it could just as easily be assuming that the future is better than it's going to be.

Our market's off by how much compared to average earnings downgrades? Market pe is about 11 ish, and long term average is 15 ish. We seem to be factoring a bit of a slow down you'd reakon.

But yes, might not be enough. Perhaps the market forward pe needs to get down to about 5...

wavepicker · 18 July 2008

Re: XAO Analysis

Market has rallied as per expectations in last post in this thread. Is it a major low? Impossible to tell yet. But as mentiond in last post, EW sub divisions appear incomplete and more importantly fixed time cycle points show not enough time has elapsed.

Rather than putting 100% faith in these tools best to look at the pattern of the trend first. The move down has so far lacked one key ingredient and that is the final congestion followed by exhaustion or thrust down.

This congestion I beleive is wave 4 currently in progress, and it this pattern that may cause the market to show as a divergence in the oscillators in the weeks ahead. As such this wave 4 might a sideways affair which may pecede that final low to our target which most likely will be a false break, and fast moves in the opposite direction start from false breaks.

Oil is in it's 4th day down, that's a close enough sign for me to say the trend maybe fractured. But go short now? Not yet! We need to see what the countertrend looks like. If it is a counterend it will 1-2 days max, and we should not get close > than 75% of the range down. Then I will short.

Cheers

theasxgorilla · 18 July 2008

Re: XAO Analysis

wavepicker said:
Market has rallied as per expectations in last post in this thread. Is it a major low? Impossible to tell yet. But as mentiond in last post, EW sub divisions appear incomplete and more importantly fixed time cycle points show not enough time has elapsed.

Agreed, I wouldn't bet on it being a low, but it looks more like a low than at any other time during this down move. The small tail and the two strong up days suggest that move could well be done for now.

theasxgorilla · 18 July 2008

Re: XAO Analysis

davo8 said:
Simple really. I read, I research and I use my brain.

If only that were all there was to it

theasxgorilla · 18 July 2008

Re: XAO Analysis

kennas said:
Since we all know this davo, it must be factored in to the market already right?

I think everyday it's in the process of being factored and priced in. It's nigh on impossible to determine the extent to which other investors will (over) react, and hence the efficient market hypo is bogus.

Sean K · 18 July 2008

Re: XAO Analysis

theasxgorilla said:
I think everyday it's in the process of being factored and priced in. It's nigh on impossible to determine the extent to which other investors will (over) react, and hence the efficient market hypo is bogus.

Merrill announced a second quarter loss of $4.9b, and I think it went up 10% on the good news. Down in after close trade though I think.

Sean K · 18 July 2008

Re: XAO Analysis

kennas said:
Merrill announced a second quarter loss of $4.9b, and I think it went up 10% on the good news. Down in after close trade though I think.

Of course, I may also underestimate the number of muppets investing out there too. Like me.

theasxgorilla · 18 July 2008

Re: XAO Analysis

kennas said:
Of course, I may also underestimate the number of muppets investing out there too. Like me.

...or people with big-time exposure without time on their side marking to market the dollar value of their losses every day. Or knowing that when they do it'll be a lot less than what they thought they were going to retire on in the next few years.

davo8 · 19 July 2008

Re: XAO Analysis

kennas said:
Since we all know this davo, it must be factored in to the market already right?

That's conventional wisdom, but nothing conventional can explain FRE & FNM going from >$20 to $5 in less than a month. Those are heavily analysed companies, and the analysts got it wrong.

These investment guys have never seen a housing collapse and credit crunch before. They don't know how to analyse it. Roubini is an economist, and he's been pretty accurate for the past 12 months. And there are others, if you know where to look. Plenty of hedge funds have been getting it right too -- but not all.

We have just seen a technical bounce driven by covering shorts, and it won't hold. The US financial sector is toast. The US broad economy will follow. Our market could go to 4200, and it may not recover for a year or more. Remember 1987?

I'll be looking for cheap stocks soon, but not banks.

Sean K · 19 July 2008

Re: XAO Analysis

DJI is entering a significant support area.

Not sure what it equates to with the XAO, or even if they are aligned at the moment.

Up is down, and down is up.....

eeeeeek!!!

Whatever the case, on the sum of the S&R buying in this zone might me a decent long term plan. Unless, we all have no idea.

The bears are definately out of their caves right now and eating the bulls alive. Ouch.

Porper · 19 July 2008

Re: XAO Analysis

kennas said:
DJI is entering a significant support area.

Not sure what it equates to with the XAO, or even if they are aligned at the moment.

Up is down, and down is up.....

eeeeeek!!!

Whatever the case, on the sum of the S&R buying in this zone might me a decent long term plan. Unless, we all have no idea.

The bears are definately out of their caves right now and eating the bulls alive. Ouch.

I posted this chart a couple weeks ago to a few on ASF privately before my computer died, which is why the data stops on the 02nd july.

Not going to get into the E.Wave debate, as I have my own views and haven't the time to try and convince people that it does have some merits.

I have been watching the support that Kennas has put on his chart for a while, (red line on attached chart), this to me gives more support to the confluence of price projections and makes this area stronger support (short term) at least.

Also look at the time projections for a turn around.Could be argued they are a week out, still of use to identify a probability zone for a change of trend, albeit maybe a short term one.

I am currently working on the next move, but if this bounce ends quickly and we go below this recent low on high volume it is extremely bearish.trying to push up through this support/now resistance would be almost impossible even medium term in my view.

So to summarise, support and resitance zones used in conjunction with E.Wave give higher probability outcomes.The more confluence the better.

rub92me · 22 July 2008

Re: XAO Analysis

Absolutely amazing. The bears finally take a day off on our market and we make the biggest gain for quite a while. Yet, not a single poster celebrating (Not even Whiskers ).
p.s. Yeah yeah I know, it's another bear trap, sucker rally, it won't last, etc. but can't we just be happy for 1 day. :

Whiskers · 22 July 2008

Re: XAO Analysis

rub92me said:
Absolutely amazing. The bears finally take a day off on our market and we make the biggest gain for quite a while. Yet, not a single poster celebrating (Not even Whiskers ).
p.s. Yeah yeah I know, it's another bear trap, sucker rally, it won't last, etc. but can't we just be happy for 1 day. :

Hehehe, I'm desperately restraining myself, rub92me.

I'm fairly confident oil has past it's peak, but the other component of my reserection of the Aus market is the weakening of the AUD against the USD... or more precisely the strengthening of the USD index. That hasn't kicked in yet, and although (according to my new "L" EW count) one target has been met, I'm still a tad cautious of our market going a bit lower to that 4,812.

It just looks like the last few days are, to quote the proper venacular of EW'ers, a bit corrective... ie might be a little widening of the little wave four of that last minor wave iv.

From my post the other day, I'm still cautious of the 'speculator' influence, although it looks like life is being made harder for them, mainly by regulations in the US, I am expecting a substaintal recovery once the consensus begins to emerge that the oil bubble has burst, which I feel should lead to some recovery of the USD index and confidence that the world economy will keep on carrying on.

Whiskers said:
Oh dear, according to further study of my micro count, I have to adjust my target DOWN again to about 4812.

Augh, common WP those speculators and manipulators have had too much of a go already. :

Trembling Hand · 22 July 2008

Re: XAO Analysis

Whiskers said:
From my post the other day, I'm still cautious of the 'speculator' influence, although it looks like life is being made harder for them, mainly by regulations in the US, I am expecting a substaintal recovery once the consensus begins to emerge that the oil bubble has burst,

Hey Whiskers. Have you ever thought about the possibility that the fools with their "I'm doing all I can" regulations actually make the POO rise??

Thought about that one?

Whiskers · 23 July 2008

Re: XAO Analysis

Trembling Hand said:
Hey Whiskers. Have you ever thought about the possibility that the fools with their "I'm doing all I can" regulations actually make the POO rise??

Thought about that one?

Well yes TH, but how about you tell how you think so!

Trembling Hand · 23 July 2008

Re: XAO Analysis

Whiskers said:
Well yes TH, but how about you tell how you think so!

Well I reckon you can't answer how. Even though you are an expert on the futures manipulators.

Whiskers · 23 July 2008

Re: XAO Analysis

Trembling Hand said:
Well I reckon you can't answer how. Even though you are an expert on the futures manipulators.

But TH, the POO has fallen since the new regulations were passed. Yes, I thought about what you propose, but I figured it wouldn't happen and it hasn't happened.

I don't pretend to be an expert of futures, but I do know a little about forensic accounting... which is the jist of the point about the potential for commercials to manipulate the market that I previously discussed with wayneL.

On balance my judgement is that the extra regulation would make it harder to speculate in the broader sense of manipulation of the market... and that seems to be born out in the price movement so far.

So why are you being so coy about sharing your theory?

Trembling Hand · 23 July 2008

Re: XAO Analysis

Figured Whiskers you haven't a clue.

You go about trying to squeeze speculators your are just as likely to cause a squeeze of the weak. In this case the shorts. Creating a SHORT SQUEESE higher.

The assumption that speculators are ALL long is just dumb. And shows a lack of understanding of what moves markets.

Whiskers · 23 July 2008

Re: XAO Analysis

Trembling Hand said:
Figured Whiskers you haven't a clue.

You go about trying to squeeze speculators your are just as likely to cause a squeeze of the weak. In this case the shorts. Creating a SHORT SQUEESE higher.

The assumption that speculators are ALL long is just dumb. And shows a lack of understanding of what moves markets.

Basically, if I recall correctly, the new regulations just bring satelite markets that feed into the US up to the same level of margin with the US markets and impose a much higher level of accountability and transparency across the whole oil market.

How are the new regulations squeezing the shorts?

XAO Technical Analysis

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