XAO Technical Analysis

nunthewiser said:

Personally thinking that many users of the EW application HERE need to get a better understanding of its workings too .......no offense intended , blah blah blah

cant say ive seen too many accurate callings on situations of late by those that proffess its greatness and ready to jump at anyone that points out that it aint no better than a ruler and pencil and ANY other TA based analysis.

i think ive had this discussion before , but hey nothing like pointing out the bleedin obvious from time to time

thankyou

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treefrog said:

I heard there is another school that is based around Glenn Neely teachings. Is it any worth to read his book? I am content around the classic style but I try to keep and open mind to any new idea."

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tech/a said:

I will point this out (Your post) which echo's the sentiment of most who just dont get it.

Let me ask this question.
If you analyse a company fundamentally and find it undervalued buy into it and find in 3 months its lost 20-50% of value--that analysis is wrong?

Or a Triangle pattern fails,or a pennent or a breakout fails or a trendline is broken or an M/A is broken or a candlestick pattern fails---these then are simply in accurate voodoo with little value?

ALL analysis simply supplies a setup---an opportunity to START or END a trade.
E/W is in some respects no different but in other respects very different in that ALL counts are continually DYNAMIC and can be updated from bar to bar.

Its not a flaw but an amazing advantage.
If people can understand that there is NO RIGIDITY and when disproven doesnt mean the worlds fallen in or the analysis has NO VALUE---then you'll actually begin to UNDERSTAND how to apply the analysis and never post a post like that above

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MRC & Co said:

Jesus, she was sick today! S&P falling too, global indices are looking absolutely HORRIBLE, so much for my short-term bounce, shows the power of anyone making 'predictions'. No point, if it hits new lows, good chance it's going lower.

Oh god, the EW debate is back, just as the new lows points above, I don't see what is wrong with HH, HL etc. Much easier

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Whiskers said:

With all the algirythmic and market predicting software out there today, maybe people are going with and getting what they expect from their software... self fullfilling prophecy.

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Any company reporting positive earnings this week might just as well have kept it to themselves: investors weren't paying attention anyway. But if a company missed profit estimates or lowered its outlook, the stock couldn't fall fast enough.
Financial Crisis

After being in panic mode the past few weeks, Wall Street is now wallowing in despair.

“The market in general is people throwing in the towel,” says Michael Cohn, chief market strategist at Atlantis Asset Management. “Bear markets go from denial to panic to despair, and we’re at the despair point, which I’m hoping is the last of the stages.”

Investors are ignoring the good news and focusing on the bad. And there's plenty of that to go around. Amid all the gloomy economic data and disappointing earnings, economists and market pros are increasingly convinced that the US and the rest of the world are headed for a painful recession.

“We’re so deeply oversold I would think the market would start to recover and rebound pretty significantly,” says Chip Hanlon, president of Delta Global Advisors. “But I think the market’s deciding that this is going to be a prolonged and painful recession. I think that’s a fair conclusion, so were getting these fits and starts.”

To be sure, a handful of the companies that posted strong earnings have seen their shares enjoy mild rallies. But most are like McDonald’s, which beat analyst estimates for the quarter and then watched its stock fall after a downbeat forecast for the rest of the year.

“Even if they report good numbers, it’s the guidance going forward,” Cohn says. “As a CEO in this type of environment, if you paint a rosy picture going forward you’re going to be thrown in jail.”

Another reason stocks can't hold rallies is that there is substantial selling pressure from hedge funds facing redemptions.

Hundreds, perhaps thousands, of the investment pools are expected to drown this year as they face intense pressure to unwind before the end of their fiscal year on Oct. 31.

“There’s nobody on the other side of these trades,” Michael Kresh, president of M.D. Kresh Financial Services, says of the hedge fund situation. “The reality is there’s nobody willing to come up to the plate and buy until they feel this is all over...Every time we get a nice up trade there’s a possibility that somebody needs to liquidate and they’re liquidating toward the end of that up day or the next day.”

That was in evidence in each of the past two weeks, when Mondays brought strong moves higher in stocks that eroded as the weeks went on.

Fear-buying has been substantial, with the Volatility Index moving into uncharted waters, while bad earnings reports have served to undercut rallies and strong earnings have had little impact.

“It’s nothing to do with what we’re seeing in earnings,” Kresh says.“What we’re seeing is a standard pattern. If you take financials out of the picture, most companies are meeting or exceeding earnings expectations. But it doesn’t seem to help. Fear is the primary driver here.”

Once the hedge fund situation unwinds, there will be clearer picture of exactly how deep a problem the recession will pose, Kresh says. Cohn, meanwhile, is awaiting the impact of the government’s additional stimulus efforts.

Hanlon is making tepid moves at buying into the weakness, using exchange-traded funds like the ProShares Ultra Small Cap [SAA 23.49 -1.38 (-5.55%) ] and the ProShares Trust Ultra QQQ [QLD 30.33 -0.28 (-0.91%) ]. The SAA moves up 2 percent for each 1 percent gain in small gaps, while the QLD gets the same return for a move higher in the Nasdaq.

Hanlon bought both funds with fairly strict stops put in to guard against steep drops.

“I’m in the camp that believes we can get (a rally) at any time,” he says. “I’m trading on the long side, but not with any conviction.”

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http://business.timesonline.co.uk/tol/business/economics/article5005207.ece

Britain’s economy shrank in the three months to September for the first time in 16 years, all but confirming that it is now in the grip of its first recession since the early Nineties.

Bleak official GDP figures showing that national income plunged by 0.5 per cent in the three months to the end of September, in the sharpest drop since the end of 1990, revealed that the toll from the credit crisis and housing crash has ended Britain’s longest unbroken run of quarterly growth since at least 1955.

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dhukka said:

Europe down -8:0% plus, S&P500 futures down -6.5% which is 'limit down', could we see the circuit breakers in action tonight? Or will the Fed and treasury reach into their ever shrinking bag of tricks and pull something out?

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Oct. 24 (Bloomberg) -- Trading in futures on the Standard & Poor's 500 Index and the Dow Jones Industrial Average has been limited after declines in the contracts of more than 6 percent triggered a so-called limit down restriction.

The S&P 500 futures will not trade below 855.20 until U.S. exchanges open for regular trading at 9:30 a.m. New York time, said Jeremy Hughes, a London-based spokesman for the Chicago Mercantile Exchange. Dow Average futures won't trade below the 8,224 level, he said. The ``limit down'' suspension allows both contracts to trade above those levels, he said.

Stocks tumbled around the world today and U.S. index futures fell on deepening concern the global economic slump will crimp corporate earnings.

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Struzball said:

exciting times...

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GreatPig said:

With the XAO at about 3964 right now, it's only 100 points above the red line.

Will it follow the last three times it hit that line, or will it break through and we say bye bye to the trend since late 1987?

Given that current conditions are supposedly much worse than those three times, I'm not holding my breath.

GP

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awg said:

My opinion: the "govt deposit g'tee" is causing retirees in particular to redeem managed funds in droves.

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MS+Tradesim said:

Green range here we come.

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