XAO Technical Analysis

nunthewiser · 3 November 2008

Re: XAO Analysis

Calls tommorow as being the top height of the current rally, intrest rate cuts should be mainly factored in but dare say will caudse a small flurry if not a nice lil spike , BUT then we heading for employment data amongst others , personally think a few cheaper trade entrys available after tommorow .

prolly wrong , pay no heed just voicing aloud my thoughts on how im looking at it and will trade accordingly , oh plus i looked at my magic chart thingo and it told me the same

no waves about it

MRC & Co · 3 November 2008

Re: XAO Analysis

Haven't looked, but what cut is factored in tomorrow, no change?

M34N · 3 November 2008

Re: XAO Analysis

MRC & Co said:
Haven't looked, but what cut is factored in tomorrow, no change?

You serious? 50 basis points if not

I personally feel this rally could go a bit longer, there's a LOT of money on the sidelines, and judging by that very large spike of around 60 points in the last 10 minutes of trade, then we could see it trend higher for the short term. There's been so much doom and gloom in the past few months that a rally in the short term, IMO, is inevitable. We've hardly had a good rally for more than a couple days since I think maybe March?

Speaking of which, did people notice those massive buy orders coming in for BHP in that last 10 mins? I noticed when I casually glanced at it, there was a few orders in there for 100,000 shares +, that's some very strong buying there. Noticed similar for MQG, RIO and a couple others. Big boys must be taking some long positions before the rate cuts and the US election results?

Either way, the long term trend is still down, and I dare say after Christmas, we should be trending back down again.

nunthewiser · 3 November 2008

Re: XAO Analysis

MRC & Co said:
Haven't looked, but what cut is factored in tomorrow, no change?

from what i hear in the convent ppl expecting 50 ......... hey in my post im not saying im gunna be right , just voicing what i THINK will happen .

MRC & Co · 3 November 2008

Re: XAO Analysis

M34N said:
You serious? 50 basis points if not

Yep, serious

So you are saying a 50bp cut is factored in for tomorrow?

I thought I heard it said the way this works, is a 50bp cut is factored in by sometime in November, which means it could come this month or next.......

Really should check up closer on this, but will find out tomorrow for sure anyways.

Was a very strong auction today hey! Looks good.

nunthewiser · 3 November 2008

Re: XAO Analysis

also my comments are not meaning rejoining the overall downtrend , just saying iam expecting a half decent pullback from latest rally which should continue tomorow but tommorow being the top before the pullback.geez m8 its hard explaining what i mean , refer to my original post and just say you were wrong if i am , .........

M34N · 3 November 2008

Re: XAO Analysis

MRC & Co said:
Yep, serious

So you are saying a 50bp cut is factored in for tomorrow?

I thought I heard it said the way this works, is a 50bp cut is factored in by sometime in November, which means it could come this month or next.......

Yeah it's definitely 50 basis points factored in for tomorrow.

nunthewiser said:
also my comments are not meaning rejoining the overall downtrend , just saying iam expecting a half decent pullback from latest rally which should continue tomorow but tommorow being the top before the pullback.geez m8 its hard explaining what i mean , refer to my original post and just say you were wrong if i am , .........

I agree nun, as much as I want the market to go up finally after so many down days, I don't think we will just pick up and move on from here. Too much damage has been done, and too many long-term investors have been burnt and will take time for them to re-enter.

saiter · 3 November 2008

Re: XAO Analysis

Awesome! If we keep getting these rallies then this will push wave 4 upwards, meaning that wave 5 will have a better chance of ending above 4000. Lets hope that the DOW ends up in the green tomorrow.

Nyden · 3 November 2008

Re: XAO Analysis

MRC & Co said:
What are you looking to do Nyden, find a point at which you can invest for the longer-term and feel safe?

Yes, the sleepless nights of 10% +/- index movements just aren't for me I'm afraid I'm waiting for volatility to subside if anything. Slow steady gains based on improving conditions ... not speculation on what may be 2 days from now.

dhukka · 3 November 2008

Re: XAO Analysis

MRC & Co said:
Haven't looked, but what cut is factored in tomorrow, no change?

SFE futures factoring 100% chance of 50bps cut with an 80% chance of 75bps.

gav · 4 November 2008

Re: XAO Analysis

Today I predict that the RBA cut interest rates by a further 100 points (not 50 like some suggest). Maybe a few big buyers yesterday afternoon predict this also, and are looking to make quick buck...

CamKawa · 4 November 2008

Re: XAO Analysis

gav said:
Today I predict that the RBA cut interest rates by a further 100 points (not 50 like some suggest). Maybe a few big buyers yesterday afternoon predict this also, and are looking to make quick buck...

I’ve got a feeling it may be a case of buy on the rumour sell on the news.

saiter · 4 November 2008

Re: XAO Analysis

Well it looks like we're into the downwards wave 5 now The XAO is already down 63.9 points.
I see this going for another 3-4 weeks.

wildthing · 4 November 2008

Re: XAO Analysis

Only a possibility...but I think we may see a retracement to test 3968...make a higher low and go on up till after xmas......then wave 5 down!
Maybe wishful thinking and only time will tell.
Cheers

MRC & Co · 4 November 2008

Re: XAO Analysis

saiter said:
Well it looks like we're into the downwards wave 5 now The XAO is already down 63.9 points.
I see this going for another 3-4 weeks.

lol, that wave wouldn't have been too fun to surf, already above open! Lot can change in the afternoon, so calling based on morning session is way too early.

Good luck in the Cup today everyone and hopefully a 100bps cut! Cheers.

treefrog · 4 November 2008

Re: XAO Analysis

$20shoes said:
I won't specifically weigh into this discussion, but some food for thought...If I have a candle pattern that has a 50/50 success rate, can I simply use this as the basis of a trading strategy?? If I could use this pattern as a simple enabler to trade, and I get me 40-50% winners ( because this formation has a 50% strike rate), then that's a good thing for a possible strategy.

spot on $20
considering all the accepted conditions for a valid morning star:
1) downtrend
2) bear candle
3) gap down
4) gap up (preferred) to > halfway up body of 2)
and the researched reliability of this delivering a subsequent bull candle about 50/50 is quite good if you are trying to pick bottoms (always a risk of a bad smell if you are into that mind)
It is good because the prior trend had to be down which in itself indicates continued down, so achieving a 50% success in that environment is a potential edge which is good.
My arguement is with the bulls whose promote the "MS! MS! Its a cert to go up from here!" nonsense.
I also have an issue with the MS =trend reversal nonsense.
If a MS proves to be successful (market rises directly following), it does not mean a trend reversal.
The subsequent UP may even break the current downtrend but that also does not mean a trend reversal.
The most fundamental (?) requirement of T/A is that a downtrend has lower lows and lower highs. An uptrend needs higher lows and higher highs.
So to talk trend reversals based on a genuine and obvious MS is quite wrong: at best a low forms for a possible subsequent higher low but it is impossible to know this until the rest of the uptrend conditions have been confirmed.
Of couse there are a number of other "potential bottom" patterns that give similar 50/50 prospects to the MS as per that research.

Whiskers · 4 November 2008

Re: XAO Analysis

Well, fwiw... the NAB has put in a pretty good looking Morning Star and the ANZ a string of three, the first probably OK, second not so good and third, best shape but on a minor low... but maybe qualifies anyway.

If we are to assume stability in the financial sector is the key to the market improving, then these two must be a reasonable sign, eh?

Btw, all the other Morning Stars that I pointed out, some three weeks old, are still tracking upwards. Re the AUD/EUR, it's morning Star is confirmed with an evening Star on the EUR/AUD.

$20shoes · 4 November 2008

Re: XAO Analysis

treefrog said:
spot on $20
considering all the accepted conditions for a valid morning star:
1) downtrend
2) bear candle
3) gap down
4) gap up (preferred) to > halfway up body of 2)
and the researched reliability of this delivering a subsequent bull candle about 50/50 is quite good if you are trying to pick bottoms (always a risk of a bad smell if you are into that mind)
It is good because the prior trend had to be down which in itself indicates continued down, so achieving a 50% success in that environment is a potential edge which is good.
My arguement is with the bulls whose promote the "MS! MS! Its a cert to go up from here!" nonsense.
I also have an issue with the MS =trend reversal nonsense.
If a MS proves to be successful (market rises directly following), it does not mean a trend reversal.
The subsequent UP may even break the current downtrend but that also does not mean a trend reversal.
The most fundamental (?) requirement of T/A is that a downtrend has lower lows and lower highs. An uptrend needs higher lows and higher highs.
So to talk trend reversals based on a genuine and obvious MS is quite wrong: at best a low forms for a possible subsequent higher low but it is impossible to know this until the rest of the uptrend conditions have been confirmed.
Of couse there are a number of other "potential bottom" patterns that give similar 50/50 prospects to the MS as per that research.

They are all good points Treefrog. Yes, you have to ask yourself: what exactly are you expecting when a condition is met, such as a MS. How can you use that to your advantage?? Is it relevant to the timeframe I'm working with...

Also, on a side note. I notice on forums (and I have been guilty of this), is that a person's bias sometimes influences how loudly they call for a signal to be valid. I'm not necessarily talking about ramping). If you're in a position, or indeed if you're in a losing position, you tend to justify your hold with a myriad of supporting data...sometimes that comes out in a subtle manner. I guess it comes back to the old flaw that you have to be correct. Sometimes, the psychology of why people post what they do ( me included) is interesting in its own right.

treefrog · 4 November 2008

Re: XAO Analysis

Whiskers said:
Well, fwiw... the NAB has put in a pretty good looking Morning Star and the ANZ a string of three, the first probably OK, second not so good and third, best shape but on a minor low... but maybe qualifies anyway.
If we are to assume stability in the financial sector is the key to the market improving, then these two must be a reasonable sign, eh?

and MQG, some rippers there.
But I think I know the problem - its those pesky gap traders - every time a gap appears they come in and close it.
sorry folks XAO thread - :topic

Whiskers · 4 November 2008

Re: XAO Analysis

treefrog said:
and MQG, some rippers there.
But I think I know the problem - its those pesky gap traders - every time a gap appears they come in and close it.
sorry folks XAO thread - :topic

Show us, treefrog.

I don't see any. The only one that comes close is the low on 18th Sept, but the 3rd candle doesn't go more than half way up the first.

C'mon treefrog, if you're trading as badly as you're getting your facts wrong, I feel sorry for you.

There was clearly a gap down on that INDU chart you insisted was not a gap down, a Morning Star.

You should recall, that research you quoted, catagorised the success rate solely on the direction of the 'single' candle following the pattern. A flaw in determining trend analysis solely on the basis of one candle. That research seemed to be aimed at daytraders who aim to trade the following dayfrom the candle formation, hence only 50% success rate.

You seem to have forgotten that I'm not a permabull... I'm a pragmatist. I have mentioned way back in the threads where I sold out of RAU on the corroberating sign of a bearish Evening Star and stayed clear of LOD on the basis of another. The rest is history.

I pointed out three bearish Evening Stars as well, EUR/AUD, Gold GBP and Gold EUR.

And you might recall a little while ago nomore4's had a shot at me in similar vain to you, but he (in)conveniently forgot that apart from my being bearish oil and gold at times among others, I argued him to go short WPL to 43 when it was in the high 50's I think, and he was contemplating/trying to go long in a thread on the forum.

Candle patterns are just one of a number of indicators I follow. I just specifically mentioned them here because there seemed to be an extraudinary number of them in concert.

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