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XAO Technical Analysis

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Re: XAO Analysis

Niz,

I'm not sure what to make of all this. Bulls versus bears and all that. But I did notice my Bank stocks jumping considerably recently and took this as a sign people were readying themselves for a correction. Now I'm not so sure.

The jump in BHP & RIO yesterday surprised me, especially as BHP was looking lethargic only a few days ago and looking to reverse. I'm hoping BHP will head higher and crack last years high, and reward the faithful.

MB
 
Re: XAO Analysis

amazing advances by bhp and rio. does look enccouraging for you holders.

still, my trading rules shall not allow me to enter at this stage. ill watch and congratulate from the side for a while yet :)

although the xao index and materials have enjoyed a good run the last few days, many of the shares i recently exited have not yet returned to my exit price.....interesting.

expect selling pressure on the dj @ 13400 - 13600.
 
Re: XAO Analysis

Budget released, tax cuts announced.

Could this persude some to not sell off and take profits this financial year?

Could we see a sell off after 1 july 07 where the profits from the current bull run are taken (so as to avoid paying taxes in this period)?
 
Re: XAO Analysis

Just mulling over XAO tonight trying to look at the charts as objectively as possible. We just might be coming up to some sort of correction here(How big not sure yet). The critical level is 6362pts. If that is breached then the wave count posted is invalidated and something completely different is happening. We have a "throwover" on the weekly chart where wave 5 has penetrated the upper channel on lower vol. Sometimes these may precede a correction.

Zooming into the daily chart there is the possiblity that we have a completed impulse here but there are also other possibilities.

All the dominant cycles on the daily chart appear to be either topping or already pointed down. Have determined the average cycle lengths from earlier cycle minima and projected forward an expected cycle length. But cycles do expand and contract as time goes by so these expected cycle lengths may not be very accurate and should only be used as a guide. Nevertheless they do show valuable information about the pattern of the trend and about the price patterns forming

Cheers
 

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Re: XAO Analysis

wavepicker said:
Just mulling over XAO tonight trying to look at the charts as objectively as possible. Cheers
Click to expand...
Thanks WP. I have to agree with what you've generally got there, although I'm still very much a newbie with EW. I haven't seen that charting software before, what is it? kennas
 
Re: XAO Analysis

kennas said:
Thanks WP. I have to agree with what you've generally got there, although I'm still very much a newbie with EW. I haven't seen that charting software before, what is it? kennas
Click to expand...

Hi Kennas,

The software is Advanced Get, although it has not generated the wave counts. They are just my thoughts at present. Generally just use AGet as a whiteboard and maker. Lower chart was generated from Globar Forex Trading platform, Dealbook360, but code for cycles was generated by myself

Cheers
 
Re: XAO Analysis

wavepicker said:
Just mulling over XAO tonight trying to look at the charts as objectively as possible. We just might be coming up to some sort of correction here(How big not sure yet). The critical level is 6362pts. If that is breached then the wave count posted is invalidated and something completely different is happening. We have a "throwover" on the weekly chart where wave 5 has penetrated the upper channel on lower vol. Sometimes these may precede a correction.

Zooming into the daily chart there is the possiblity that we have a completed impulse here but there are also other possibilities.

All the dominant cycles on the daily chart appear to be either topping or already pointed down. Have determined the average cycle lengths from earlier cycle minima and projected forward an expected cycle length. But cycles do expand and contract as time goes by so these expected cycle lengths may not be very accurate and should only be used as a guide. Nevertheless they do show valuable information about the pattern of the trend and about the price patterns forming

Cheers
Click to expand...

Thanks for your thoughts.
Nice software as well :cool:
 
Re: XAO Analysis

Just raising a possibility here. Most recent major declines (May 2006, Feb 2007) have been preceded by a broadening wedge formation, so maybe the next correction might be the same...? This has got a target of ~6500 by mid June. (Sorry, used xjo here).

Just food for thought for the chart chompers out there, nothing more.:)
 

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Re: XAO Analysis

155638.png


BOTTOM LINE
9/5:
EW Trend: Up CAUTION!
Price Trend: Up
Trend Strength: Strong
Broker Consensus: n/a
4/5:
EW Trend: Up
Price Trend: Up
Trend Strength: Strong
Broker Consensus: n/a
LAYMANS ANALYSIS
9/5:
VIDEO ANALYSIS (2 mins 43 secs)
It's only been a few days since the last update, but today was no ordinary day. When you see two of the top six capitalised stocks go through the roof and back again, you need to take notice. RIO and BHP were all action on rumour and innuendo. Who really knows? What we do know from a technical perspective is that both exhibited classic traits of blow-off tops. I stated just recently (May 1st) that BHP had the possibility of hitting $32.50. Today's high? $32.58. Today's close? $31.93. Volume wasn't overly high at all, so quite possibly we can look at it's movement as lack of follow through demand. RIO is a slightly different, and more bearish concern. My target was $101.52. Today's high? $99.69. Today's close? $95.50. But, the big difference is volume. RIO had ultra high volume. This combined with a low close suggests supply and in turn suggests we may have seen a serious high. Yes we could go on with it, but it says to me that the market doesn't think so. This is a classic blow-off top in RIO and I suggest anyone who has been long basis my analysis of late March take serious note. The XJO also missed the "squeeze" to 6400 by just a few points. An old market adage, "don't be a dick for a tick" basically means it's not about perfection. We've achieved what we expected and we're now showing signs of reversing - now. We may well see the XJO back to 6100 over the coming few weeks - CAUTION.
4/5:
VIDEO ANALYSIS (1 mins 36 secs)
The pace of these gains is unrelenting. We're seeing something truly special in these markets driven by the resources boom and the influx of funds from SMSF's. At the rate we're going we could see 6700 by end of June. At this stage however we're getting very close to being over-extended but we may still squeeze to 6400 over the next week before completing this stage of the trend. Assuming that will occur, I would then expect, aligned with the US market, a reversal of these current gains back to the 6000 to 6100 area, aligned with the major highs set in February. There is of course always a chance that the anticipated reversal will only show itself as a sideways consolidation pattern without a great deal of underlying weakness. Either way, further gains through to 6700 are still possible. It would take a break back through 5917 so suggest this current pattern has terminated.

TECHNICAL DISCUSSION
9/5:
The XJO has pushed within 18-points of the 6400 target for this wave. It;s highly probable that we've seen a wave-v and therefore the intermediate degree wave-(iii) high. As such we should now expect wave-(iv) to unfold back toward 6100 over the coming weeks. Today was not high volume, but the low close combination suggests lack of demand. Lack of demand means that it may not take a great deal to knock the market back down again. If RIO and/or BHP come out and refute these rumours we could see quite a dramatic reversal of fortune. I stress caution here. The risk is to the downside and 6100 is in my sights, although this is still seen as a corrective move within a larger up trend. It would take a break below 5917 to get bearish though.
4/5:
The impulsive pattern discussed earlier this week has sub-divided into a smaller degree labelled in MAGENTA. The wave-v target for this structure is circa 6400 coinciding with the upper side of the channel. A completion of this degree wave-v will therefore signal the completion of the intermediate degree wave-(iii) and this will be followed by some setbacks as wave-(iv) unfolds. I guess we need to continue to suggest this strength remains firmly in place until June 31. By that stage we could see the 261.8x wave-(i) at 6700.


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.

Past performance is not a reliable indication of future performance. This material has been prepared based on information believed to be accurate at the time of publication. Subsequent changes in circumstances may occur at any time and may impact the accuracy of the information.
 
Re: XAO Analysis

Nick Radge said:
155638.png


BOTTOM LINE
9/5:
EW Trend: Up CAUTION!
Price Trend: Up
Trend Strength: Strong
Broker Consensus: n/a
4/5:
EW Trend: Up
Price Trend: Up
Trend Strength: Strong
Broker Consensus: n/a
LAYMANS ANALYSIS
9/5:
VIDEO ANALYSIS (2 mins 43 secs)
It's only been a few days since the last update, but today was no ordinary day. When you see two of the top six capitalised stocks go through the roof and back again, you need to take notice. RIO and BHP were all action on rumour and innuendo. Who really knows? What we do know from a technical perspective is that both exhibited classic traits of blow-off tops. I stated just recently (May 1st) that BHP had the possibility of hitting $32.50. Today's high? $32.58. Today's close? $31.93. Volume wasn't overly high at all, so quite possibly we can look at it's movement as lack of follow through demand. RIO is a slightly different, and more bearish concern. My target was $101.52. Today's high? $99.69. Today's close? $95.50. But, the big difference is volume. RIO had ultra high volume. This combined with a low close suggests supply and in turn suggests we may have seen a serious high. Yes we could go on with it, but it says to me that the market doesn't think so. This is a classic blow-off top in RIO and I suggest anyone who has been long basis my analysis of late March take serious note. The XJO also missed the "squeeze" to 6400 by just a few points. An old market adage, "don't be a dick for a tick" basically means it's not about perfection. We've achieved what we expected and we're now showing signs of reversing - now. We may well see the XJO back to 6100 over the coming few weeks - CAUTION.
4/5:
VIDEO ANALYSIS (1 mins 36 secs)
The pace of these gains is unrelenting. We're seeing something truly special in these markets driven by the resources boom and the influx of funds from SMSF's. At the rate we're going we could see 6700 by end of June. At this stage however we're getting very close to being over-extended but we may still squeeze to 6400 over the next week before completing this stage of the trend. Assuming that will occur, I would then expect, aligned with the US market, a reversal of these current gains back to the 6000 to 6100 area, aligned with the major highs set in February. There is of course always a chance that the anticipated reversal will only show itself as a sideways consolidation pattern without a great deal of underlying weakness. Either way, further gains through to 6700 are still possible. It would take a break back through 5917 so suggest this current pattern has terminated.

TECHNICAL DISCUSSION
9/5:
The XJO has pushed within 18-points of the 6400 target for this wave. It;s highly probable that we've seen a wave-v and therefore the intermediate degree wave-(iii) high. As such we should now expect wave-(iv) to unfold back toward 6100 over the coming weeks. Today was not high volume, but the low close combination suggests lack of demand. Lack of demand means that it may not take a great deal to knock the market back down again. If RIO and/or BHP come out and refute these rumours we could see quite a dramatic reversal of fortune. I stress caution here. The risk is to the downside and 6100 is in my sights, although this is still seen as a corrective move within a larger up trend. It would take a break below 5917 to get bearish though.
4/5:
The impulsive pattern discussed earlier this week has sub-divided into a smaller degree labelled in MAGENTA. The wave-v target for this structure is circa 6400 coinciding with the upper side of the channel. A completion of this degree wave-v will therefore signal the completion of the intermediate degree wave-(iii) and this will be followed by some setbacks as wave-(iv) unfolds. I guess we need to continue to suggest this strength remains firmly in place until June 31. By that stage we could see the 261.8x wave-(i) at 6700.


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.

Past performance is not a reliable indication of future performance. This material has been prepared based on information believed to be accurate at the time of publication. Subsequent changes in circumstances may occur at any time and may impact the accuracy of the information.
Click to expand...


Totally agree re your analysis on RIO Nick. Today could well be a top in the making for RIO of some degree. I have the sideways move in RIO for the last number of months as some sort of contracting triangle 4th wave(not sure what degree of trend at this stage and it doesn't matter). The point here is that these patterns precede the last actionary wave in an impulse(wave 5 and these are usually by the height of the triangle itself) added to the last wave of the triangle (subwave e). The ensuing wave 5 is usually quite a sharp "thrust" or blowoff and usually happens on lower volume.

If I have seen these patterns once, then I have seen them 1000 times!! I hope other EW paractioners start to take notice of these, as a number of practioners have posted fine examples in other threads. They can be a very poweful signal.

Will be inetersting to see what follows in the days and weeks ahead.

Cheers
 
Re: XAO Analysis

wavepicker said:
Totally agree re your analysis on RIO Nick. Today could well be a top in the making for RIO of some degree. I have the sideways move in RIO for the last number of months as some sort of contracting triangle 4th wave(not sure what degree of trend at this stage and it doesn't matter). The point here is that these patterns precede the last actionary wave in an impulse(wave 5 and these are usually by the height of the triangle itself) added to the last wave of the triangle (subwave e). The ensuing wave 5 is usually quite a sharp "thrust" or blowoff and usually happens on lower volume.

If I have seen these patterns once, then I have seen them 1000 times!! I hope other EW paractioners start to take notice of these, as a number of practioners have posted fine examples in other threads. They can be a very poweful signal.

Will be inetersting to see what follows in the days and weeks ahead.

Cheers
Click to expand...


Also agree regarding RIO with both Wave and Nick.
But remember RIO has very small weighting on the indices compared to BHP...:2twocents
 
Re: XAO Analysis

Just remember guys a Takeover offer for RIO at $110- $130 would screw your theory re Blow Off top, I was told todays buying was mainly Insto's, Friday and Monday was Overseas Insto's, Tuesday and Today were local
 
Re: XAO Analysis

YOUNG_TRADER said:
Just remember guys a Takeover offer for RIO at $110- $130 would screw your theory re Blow Off top, I was told todays buying was mainly Insto's, Friday and Monday was Overseas Insto's, Tuesday and Today were local
Click to expand...

True..... however one thing to note in the mix is that on Monday, according to the ASX, 2.6% of RIO's stock was short sold. To me, this wasn't insto's buying from a price action point of view - the run up was generated on rumour. We got to 99.60 level just before 2.00 pm, where the insto's are normally on lunch and then it was strategically sold down throughout the afternoon. My opinion - this is just rife rumours - Rio confirms BHP isn't in the mix and the close on the middle of the bar reeks of impulsive, scrambling buyers, the shorts covering at all costs and strategic sales of stock by big holders.... I am with Nick here, everything points to a sell down tomorrow. If the rumours were true, my feeling is we would have closed on the highs, because the instos would have wanted in at all costs....

However, for the broader index, today was definately a warning sign in general.....

Best of luck to all traders!

Cheers
Reece
 
Re: XAO Analysis

Here is an updated chart but with my seasonal timing dates added in. The horizontal lines are typical seasonal changes in trend and you can see that of late they hold well against the EW counts that I have. Note to the far left that Mar 2 was the start of seasonal strength and also coincided with the significant lows.

Green means seasonal strength coming in
Red means seasonal weakness coming in
Grey means sideways.

We've possibly got a wave-(iii) in place (mentioned a few days ago) which coincides with seasonal weakness starting on or near May 14 and running through to May 21. Therefore I'd be looking at this period as the wave-(iv) decline to unfold down to the support area.

156815.png
 
Re: XAO Analysis

so given that we've had no retrace to speak of Nick I guess you'd be looking for onwards & upwards from here from May 21?

I ran some automated point & figure counts across ASX / XAO a few days ago, gave targets in the low 6,400's then up to 6,700 & 6,800
 
Re: XAO Analysis

I have been doing a study into Cycles Analysis now for a number on years in order to resolve ambiguities or flaws in other methods that I such as EW.

I have progressed a very far, but so far have not been able to extrapolate combinations of current cycles into the future( although much can be gleaned and in fact forecast, without doing this simply looking at the cycles at the current juncture)

The Foundation For the Study Of Cycles in the USA have created a peice of software called Techsignal based on historical data for conducting Cycles Analysis. The more data it has to work with the better the results that can be expected.

Someone requested they do a study on the Aussie market (in this case the SPI200)

The results seem to gel quite nicely with other forms of analysis on this thread such as EW. This is a computer generated forecast and does not mean it will happen!! But it's just interesting how it fits in with other analysis

http://cyclesresearch.net/SPI200.htm
 
Re: XAO Analysis

wavepicker said:
I have been doing a study into Cycles Analysis now for a number on years in order to resolve ambiguities or flaws in other methods that I such as EW.

I have progressed a very far, but so far have not been able to extrapolate combinations of current cycles into the future( although much can be gleaned and in fact forecast, without doing this simply looking at the cycles at the current juncture)

The Foundation For the Study Of Cycles in the USA have created a peice of software called Techsignal based on historical data for conducting Cycles Analysis. The more data it has to work with the better the results that can be expected.

Someone requested they do a study on the Aussie market (in this case the SPI200)

The results seem to gel quite nicely with other forms of analysis on this thread such as EW. This is a computer generated forecast and does not mean it will happen!! But it's just interesting how it fits in with other analysis

http://cyclesresearch.net/SPI200.htm
Click to expand...

Hi wave,

Had a look at the link , is the projection supposed to read 5400-ish by the beginning of June?

DId i read it correctly?

I noticed how the program was way off at the beginning of the chart.
 
Re: XAO Analysis

Looks that way nizar, but once again I am not exactly sure how reliable this thing is as I have never used it.

Yes it was way of the mark the on the left hand side. Down the bottom of the chart there is list of how many cycles have been used for the analysis. There are 11 boxes that are checked. Theoretically there are infinite number of cycles possible but I dare say this has used the dominant cycles for the analysis(based on an FFT analysis) to make the projection. If all the cycles were used, and then summed together then the cycle trace should exactly match the original price series.

I have seen various neural network softwares that do a similar thing. Sometimes their projections are spot on and other times they are way off the mark. Just thought I would post this as a comparison to other analysis being put forward.

Cheers
 
Re: XAO Analysis

Dear N/R,
Could you up date and repost your chart as very interesting and would like to see more. Tks
TB
 
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