XAO Technical Analysis

explod · 3 August 2008

Re: XAO Analysis

wavepicker said:
Explod, who are these analysts who predicted the start of this bear market from 5 years ago. I would like to read their comments they posted 5 years ago that this index(XAO) or an other index would reach 6800+ in November 07.
If they got these numbers right then they (and YOU) with such an accurate Crystal must be must be mega rich right??? My experience in the past(and I know rederob disagrees) is that fundementals lag the market. When the subprime problem first surfaced last year in August the market tanked and then rose to new highs in November. It's only now after the market has sold off dramamtically how fundemntally bad this issue has become. BUT the market moved first. If things are to improve in the near future, the market will move first and then the fundemental good news will surface months after. ATM all we hear is bad news in the financial press, and at the market peak last year it was good news.

I have no crystal ball and have been out of the market for 12 months except for 2 gold specs I hold for the longer term. My physical gold and silver, (45% of my invetment holdings) are up 40% since this time last year.

Just follow a long term simple fundamental. And when the taxi driver starts to tell me about gold I will be out very quick. When gold hit $US1000 it was recently stated it did not even make it onto the front business page of the Wall Street Journal, that will apparently be another sign to sell.

The books, I have quoted many times. All out on loan at this time but two titles off the top of my head, "Financial Armageddon" (2006) and "How to Survive the Crash"(2002) Have been particularly accurate on the failure of the US banks and fall of the US dollar.

Porper · 3 August 2008

Re: XAO Analysis

explod said:
I have and can survive sleeping under a barbed wire fence, few others will be able to. It may not come to that, but ready.

There will be a lot of warning before things get that bad that I have to live under a barbed wire fence.Maybe I should go and buy a roll just incase

As we cannot give advice on ASF I wont say please lighten up and stop worrying about something that is highly unlikely to happen.

More reason to enjoy life while you can Explode before Armageddon hits.

wavepicker · 3 August 2008

Re: XAO Analysis

explod said:
My physical gold and silver, (45% of my invetment holdings) are up 40% since this time last year.

Traded against USD Physical is approx 40% compared to last year. Traded against the AUD it's only up 18.5%. You have probably made a lot less than you think, sorry to dissapoint.

explod said:
The books, I have quoted many times. All out on loan at this time but two titles off the top of my head, "Financial Armageddon" (2006) and "How to Survive the Crash"(2002) Have been particularly accurate on the failure of the US banks and fall of the US dollar.

Yes but did they say at what level the indices (Dow Jones or SP500) would topout and when implod??? You did not answer the question.

>Apocalypto< · 3 August 2008

Re: XAO Analysis

explod said:
Based on fundamentals I believe that the stock market correction in the medimu to longer term has only just begun. As some analysts (who predicted this down turn accurately up to 5 years ago) have said, "what we have now is just the ringing of the bell for the start of the game". Another said, "we are just up to the National Anthem.

However putting all that aside, have the wave analysts put the ruler over the period of 1929 through to 1932, in which time some markets dropped up to 90% ??

Some predict, with fundamental support, that this time will be worse.

5 years ago was 2003 the start of the bull market. so these guys were calling a bear market before a bull had even got going my god these guys are good!

Do you have their contact number Explod? I want to call and make sure tomorrow is not my last day on earth and i should stay home under my bed!

Whiskers · 4 August 2008

Re: XAO Analysis

How certain of your (big picture) count are you EW'ers?

Most of you seem to think we are in a significant wave four.

Here's a controversial thought for you!

Mind you I'm inclined to think it's right, even thought I don't yet have detailed accurate charts going right back, I started from the beginning and worked more mathematically to arrive at this proposition on a rough line chart.

What if we made a blow off top for the end of Super Cycle one last year and we have now put in the bottom of the first Super Cycle wave two?

A short sharp correction of about 29% to the bottom the other day would qualify for the bottom.

wavepicker · 4 August 2008

Re: XAO Analysis

Whiskers said:
How certain of your (big picture) count are you EW'ers?

Most of you seem to think we are in a significant wave four.

Here's a controversial thought for you!

Mind you I'm inclined to think it's right, even thought I don't yet have detailed accurate charts going right back, I started from the beginning and worked more mathematically to arrive at this proposition on a rough line chart.

What if we made a blow off top for the end of Super Cycle one last year and we have now put in the bottom of the first Super Cycle wave two?

A short sharp correction of about 29% to the bottom the other day would qualify for the bottom.

Anything is possible Whiskers. I suppose no one can answer this question can they until the market gives us a few more clues in the years ahead?

Porper · 4 August 2008

Re: XAO Analysis

Whiskers said:
How certain of your (big picture) count are you EW'ers?

Most of you seem to think we are in a significant wave four.

Here's a controversial thought for you!

Mind you I'm inclined to think it's right, even thought I don't yet have detailed accurate charts going right back, I started from the beginning and worked more mathematically to arrive at this proposition on a rough line chart.

What if we made a blow off top for the end of Super Cycle one last year and we have now put in the bottom of the first Super Cycle wave two?

A short sharp correction of about 29% to the bottom the other day would qualify for the bottom.

When does your count start from Whiskers ?

This wave 2 (if it is ) isn't even a year old yet so we must have some sort of equality in waves.Also 29% for a wave 2 is very short, a wave 4 of 29% would be better

But in exceptional times like these you can get strange price action so text book counts can go out of the window, maybe put up a chart and we can have a look.

explod · 4 August 2008

Re: XAO Analysis

>Apocalypto< said:
5 years ago was 2003 the start of the bull market. so these guys were calling a bear market before a bull had even got going my god these guys are good!

Do you have their contact number Explod? I want to call and make sure tomorrow is not my last day on earth and i should stay home under my bed!

You and many others forget the big picture. There was a general bull to the Dot.com bubble. If you look at the 10 year Dow Chart you will see that the 2002/03 rise coincided with the US fed feeding cheap money into the system. The huge run up in the Dow was built on cheap borrowed money. Any good economist worth his salt recognised this and could see the folly. As I stated yesterday it was beyond incredible that the US Govt and the Fed could fool the sheeple for so long.

In 03 the Dow was 7,500 On what has been revealed of late the real value will be very much below that.

And a few explode'sions now and again is good for reality. Waves, go for it, it is all usefull. My Dad held his cattle in the tought times and sold in the good. He certainly looked at the trends and cycles but not in isolation. This thread is about the whole picture of the XAO.

Short term if you like but be ready for anything in this market.

brty · 4 August 2008

Re: XAO Analysis

Hi,

If I've uploaded it correctly, the following graph shows the performance of the XAO over the last 107 years (retrospectively calculated prior to 1980). What is noticeable is that the fall from 70-74 was greater for our market than the 29-32 crash.

Apart from those 2 events, plus the 87 crash where the market fell 45-55%, there have been 5 other occasions where the market fell 25-36%. Also noticeable is that on most occasions the major falls occurred in the first year from the top.

brty

CamKawa · 4 August 2008

Re: XAO Analysis

This is a monthly chart of XAO back to 1979. As you can see we have some way to go yet before XAO gets back to it's trend line, let alone become oversold.

CamKawa · 4 August 2008

Re: XAO Analysis

With XAO being heavily influenced by the DOW I'd thought I'd post a long term monthly chart of it. Do you notice anything different about the last 2 decades? Possibly a bit deleveraging ahead of us maybe?

tcoates · 4 August 2008

Re: XAO Analysis

I think that chart (below) should use a log scale...

http://finance.yahoo.com/charts?s=^DJI#chart1:symbol=^dji;range=my;indicator=volume;charttype=ohlc;crosshair=on;ohlcvalues=1;logscale=on;source=undefined

Tim

Whiskers · 4 August 2008

Re: XAO Analysis

Porper said:
When does your count start from Whiskers ?

This wave 2 (if it is ) isn't even a year old yet so we must have some sort of equality in waves.Also 29% for a wave 2 is very short, a wave 4 of 29% would be better

Porper, I went back to the 1860's when the first stock exchange was setup in Melbourne. So far I only have a rough monthly line chart from the 1900's and some literature about a couple of significant corrections between the 1860's and 1900. So it's a bit presumptious, but since I haven't seen an EW count going back that far, I thought it worth a quick mainly mathematical exercise and a question.

I was rather hoping someone had a count from the very beginning, to save me the trouble... cos I'm quite a devils advocate, even of my own reasoning... rarely take anything for granted if I can analyise it for myself.

The thing that prompted me to query the big picture count is that I saw a promo EWI video dated mid june on oil and they seemed to be fully expecting the minor and intermediate counts of the last primary leg to go well past $160.

The other thing that I understand Elliott originally did was marry his FA with his EW count to get the most probable count.

I'll see if I can get some sort of a chart pre 1900 and label it up.

But in exceptional times like these you can get strange price action so text book counts can go out of the window, maybe put up a chart and we can have a look.

My point precisely. Since EW is becoming more widely known and used it seems to me that if large institutions used it and with the amount of money that's been floating around the last decade or so, one should at least consider the possibility that they might exploit EW, thus distort the original EW rules, after all that's what human nature usually does with rules.

motorway · 4 August 2008

Re: XAO Analysis

My point precisely. Since EW is becoming more widely known and used it seems to me that if large institutions used it and with the amount of money that's been floating around the last decade or so, one should at least consider the possibility that they might exploit EW, thus distort the original EW rules, after all that's what human nature usually does with rules.

“I had heard about technical analysis and chart patterns, and looking at this stuff I would say, what kind of voodoo is this? I was very, very skeptical that technical analysis had value. So I used the computers to check it out, and what I learned was that there was, in fact, no useful reality there. Statistically and mathematically all these tools ”” stochastics, RSI, chart patterns, Elliot Wave, and so on ”” just don’t work.

If you code any of these rigorously into a computer and test them they produce no statistical basis for making money; they’re just wishful thinking. But I did find one thing that worked. In fact almost all technical analysis can be reduced to this one thing, though most people don’t realize it"

Dr Gary Hirst, spent huge sums on computers and programming, analyzing a variety of technical analysis systems.

and that is before "they" are considered

IE: He also said he found EW very useful and "these guys" should not be discouraged.

IF it boils down to "one thing"
That usually ends up being two things
That the "one thing" results from.

motorway

wavepicker · 4 August 2008

Re: XAO Analysis

CamKawa said:
This is a monthly chart of XAO back to 1979. As you can see we have some way to go yet before XAO gets back to it's trend line, let alone become oversold.

Is it a necessity to reach that trendline though? Is the trendline an accurate level of where prices should regress to? I guess sometimes it is and sometimes it isn't. If you look at the correction of the DJIA from 2000-2003 when it lost 39% it didn't even come close to touching that trendline.

It maybe that the market does not reach that long term trendline on this leg down, in fact probabilities favour that it won't.

CamKawa · 4 August 2008

Re: XAO Analysis

wavepicker said:
Is it a necessity to reach that trendline though?

Maybe not.

wavepicker said:
Is the trendline an accurate level of where prices should regress to?.

Leonardo Fibonacci may disagree with me. I've added the retracements to the chart. Though I don't think XAO lends itself to Fibonacci analysis very well.

wavepicker said:
I guess sometimes it is and sometimes it isn't. If you look at the correction of the DJIA from 2000-2003 when it lost 39% it didn't even come close to touching that trendline.

I think the US economy has the potential to be in more trouble now than it was during the dot com crash and thus feel a bigger correction could be on the cards. I'm preparing myself for the worst possible outcome and hoping I'm wrong.

motorway · 4 August 2008

Re: XAO Analysis

Is it a necessity to reach that trendline though? Is the trendline an accurate level of where prices should regress to?

Well it could reach that trendline at any time or no time

IE...It could reach it when the index is above 7000

eg in ten years time when ever or when never

Just keep projecting the line forward

I bet ( have not looked ) that GM in USA has regressed back to old ( very old ? ) trend lines...

But all that is beside the point ?

A trendline must be kept sensitive

A number of factors

eg square root of time just one..

motorway

Nick Radge · 4 August 2008

Re: XAO Analysis

I have data back to 1875 but have not put a count to it as yet.

This is the count I have been using since 1954 that I have discussed earlier in this post within my March 2007 Special Report. I stand by that view, that is, we should see a very similar period like we did from 1988 through 1993.

This post may contain advice that has been prepared by Reef Capital Coaching ABN 24 092 309 978 (“RCC”) and is general advice and does not take account of your objectives, financial situation or needs. Before acting on this general advice you should therefore consider the appropriateness of the advice having regard to your situation. We recommend you obtain financial, legal and taxation advice before making any financial investment decision.

wavepicker · 4 August 2008

Re: XAO Analysis

motorway said:
Well it could reach that trendline at any time or no time

IE...It could reach it when the index is above 7000

eg in ten years time when ever or when never

Just keep projecting the line forward

I bet ( have not looked ) that GM in USA has regressed back to old ( very old ? ) trend lines...

But all that is beside the point ?

A trendline must be kept sensitive

A number of factors

eg square root of time just one..

motorway

Trendlines need to be constantly adjusted as they are too rigid and not dynamic enough. Under certain circumtances a trendline channel can be quite useful, especially in EW.

I prefer the use of constant width envelopes myself using centered moving averages with the span set by the determined dominant cycle. (see below ont he XAO Monthly chart) The envelopes extrapolated forward hint at a signficant countertrend sometime soon.

Already it has been demonstrated by various cycle techniques (both fixed and dynamic that this rally is due).Cycles are real, they exist in the market. The hard part is finding the significant cycles to use.

Another technique that adds to the confluence of the previously stated 4600-4800 target zone is by the use of a half span centered average. If we are currently running a 48 span cycle on monthly chart( 48 bar centered MA) then it's half span(24 centered MA) when extrapolated forward by eyeballing should give us a target of approx 4656.(this technique i used to pinpoint low in Gold in 2006) I have previously mentioned the 4686-4691 level has a strong fib cluster. This may or may not be significant but, there seems to be similar messages from varying techniques around these levels

Cheers

motorway · 4 August 2008

Re: XAO Analysis

Wave I see by the widening of your channel

That it is adaptive
and is tracking the "action"
to some extent
and giving a definition of high and low

But is the lookback dynamic or static ?

I see cycles as structural but not periodic !

Here is one of My main charts of the XAO

We have congestion
( the most important aspect)

OK another word for congestion is "FULL"

what alternates with FULL ? is Emptiness

Now which way ?

We need to identify light or heavy

and then is the element of "time"

The movement from dullness to activity

We can all clearly see the pattern ( OF P,V & T )
and what happened at the last "juncture"

This is even more significant juncture
( more congestion, the full is fuller )

There would seem to be significant overhead resistance
and support is "distant" ( a lot of fluctuations separate. )

between the 7 ( July ) and the first bottom
is a very preservating pattern DOWN

It is a "battle formation" ( is it already dissipated ? )

note how significant the objective resistance line ( 45 degree )
has become ( as last time ).

Full Empty

beware empty

But we need to see lightness
in order to go long

If going long the XAO
a point of negation ( stop loss point ) is clearly defined...

But I would not be going long atm
if the XAO was a stock

the entire pattern links up
to give significant downside objectives

( hint.. these are not the fluctuations of a coin toss
these fluctuations are all connected )

If the trend line is penetrated
a key word ( from the P&F literature )
& question

is ostensible
the opposite of which is profound

motorway

XAO Technical Analysis

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