XAO Technical Analysis

[nick2fish]

Re: XAO Analysis

XAO 3440 area will pull the market up, It is the 50% retrace of all time high, not to mention the tops of 01-02. If you go back to 1987 you will see that it had a 50% pullback and bottomed. 50% is THE MOST IMPORTANT retracement number in the market without any doubt, whether your a technician or a fundie everybody knows what 50% means, (61.8 means nothing to fundies and many techies) so if your looking for major buying from fundies and techies look at 50%. The 50% area will get bought up big time if and when it happens, COUNT ON IT.

Now of course whether that stops the market long term may be a different matter, however short mid term if the marekt gets down there then we will bounce hard.

But we have to get there first, time will tell.

Good Post so I want to paste it again. Agree totally with the support level and subsequent retracement. This is the area of realistic outcomes that I am factoring into my trading at the moment.

 

[nunthewiser]

Re: XAO Analysis

Ageo I may not be up to your legendary trader status, but I have traded through the sub-prime and I am still in the game so pls do not take me for a fool. Thank You, Nick

And that my friends is a fair call ... knows for a fact through listening to other chats/emails/forums/comments that this downturn has left many a would be trader as either a long term holder with no cash left to trade OR has left many a would be trader with no capital OR holdings to continue the game ....

well done and may the force be with you

 

[nunthewiser]

Re: XAO Analysis

Hey, you lot... stop scaring my cats.

Cat's are really man's best friend... ya never know when you'll need an extra life or two.


Besides, there's not much meat on a scrawny old cat, they're mostly a few tough little muscles and cunning grey matter.

Now BEARS on the other hand are big and plentifull atm... and mostly starting to tire out, so they're easy prey ... except Panda's of course, they're protected.

was gunna say something crude and rude regarding cats alternative name but being a nun i thought better of it.

as far as that big ole bear tiring out i reckon all he needs is a good feed of fresh money to give him back his ooomf before he swallows his next new bunch of prey..

 

[kotim]

Re: XAO Analysis

I've certainly noticed a few people with shinier 'coats' recently, perhaps there is truth in what those cat/dog food adds tell us.

 

[MRC & Co]

Re: XAO Analysis

so if your looking for major buying from fundies look at 50%. The 50% area will get bought up big time if and when it happens, COUNT ON IT.

Fundies use 50% retracements? Never seen that side of the fence, global macro positions of institutions that is, so unsure...........

But if we move to and through that 50% level due to whatever current sentiment reading, techies will push it through even further! A time when 'jumping the creek' and motorway comes in handy.

 

[kotim]

Re: XAO Analysis

When you say half price (50%) everybody listens, some act and some don't, everybody wants a discount and 50% is a very serious discount

 

[MRC & Co]

Re: XAO Analysis

When you say half price (50%) everybody listens, some act and some don't, everybody wants a discount and 50% is a very serious discount

lol, doesn't exactly GUARANTEE institutional support as you suggest. But an important level nonetheless.

Oh and actually not part of the fib sequence if I am correct.

 

[$20shoes]

Re: XAO Analysis

When you say half price (50%) everybody listens, some act and some don't, everybody wants a discount and 50% is a very serious discount

Of course, there is that natural tendency to look for a 50% mark as being a level of equilibrium, or a return to a mean, since it fulfils the human tendency to define "a" relative to "b" - there are two distinct parts to the market; where there is Yin, there is a Yang; where there is an action, there's an opposite reaction; where there is East, there is West. There is a a sense of harmony at a midpoint ; it has a very human and innate level of attraction.

The concept of equilibrium is an extremely important to some Japanese traders. For example, one of the MA studies in a cloud chart marks the midpoint of the market to which the price could potentially spend an equal amount of time above and below.

Some of us may look for the midpoints in channels and bands an other studies too.

We can only wait and see how much creedence the market gives to this level. Regarding her movements, the markets tend to behave in a very disharmonious manner concerning any calls I make!!!

 

[skyQuake]

Re: XAO Analysis

In my experience with fibs, they work better with recent trends rather than some low made so far back that everyone has forgotten about.



XJO from the all time high in Oct 07 to mid Jan this yr, the bounce was sharp like the decline. Intraday it hit 50% then came off savagely.




Similar but weaker, made new lows, then tried to bounce again. 50% arrested the rally.




Finally, this fib is the retractment of the best know trend, the 03 to 07 rally. Bounced off 50% again, tested 38.2% from the downside and failing.

You need REAL and RECENT levels to draw retracements; the more well known the trend, the better. 3400 and 3300 whatever are NOT fib retracements. Sure if you keep looking back to the past you'll find some low that agrees with those levels.

Fib levels make for good short/medium term bounces and reversals. I use them a fair bit but would not make any long term bets relying on pure fibs. Have a look at any historical charts and show me something that has made a nice even 50% low and new highs from there.

Cheers.

 

[davo8]

Re: XAO Analysis

You need REAL and RECENT levels to draw retracements; the more well known the trend, the better. 3400 and 3300 whatever are NOT fib retracements. Sure if you keep looking back to the past you'll find some low that agrees with those levels.

But for those of us with long memories who think this fib stuff is hokum, those are support and resistance levels that were pretty solid at the time. If the April 2002 and April 2004 levels hold, I think you'll see buyers. Forget this 38% of whatever stuff, these are straight levels everyone can see and everyone will pay attention to.

 

[skyQuake]

Re: XAO Analysis

But for those of us with long memories who think this fib stuff is hokum, those are support and resistance levels that were pretty solid at the time. If the April 2002 and April 2004 levels hold, I think you'll see buyers. Forget this 38% of whatever stuff, these are straight levels everyone can see and everyone will pay attention to.

Yeh, thats pretty much my point too; Not everyone believes in fibs, and the more arcane you make your fib retractments the less likely its gonna work. Visible S&R levels are more likely to be obeyed than pure fibs.

 

[motorway]

Re: XAO Analysis

But for those of us with long memories who think this fib stuff is hokum, those are support and resistance levels that were pretty solid at the time. If the April 2002 and April 2004 levels hold, I think you'll see buyers. Forget this 38% of whatever stuff, these are straight levels everyone can see and everyone will pay attention to.

http://www.cass.city.ac.uk/media/stories/resources/Magic_Numbers_in_the_Dow.pdf

Our conclusion must be that there is no significant difference between the frequencies with which price and time ratios occur in cycles in the Dow Jones Industrial Average, and frequencies which we would expect to occur at random in such a time series.

In our introduction, we noted that empirical evidence from academic studies suggests that not all of technical analysis can be dismissed prima facie. The evidence from this paper suggests that the idea that round fractions and Fibonacci ratios occur in the Dow
can be dismissed.

Magic_Numbers ----> There aren't any , at least in the past.


dyor
motorway

 

[OzWaveGuy]

Re: XAO Analysis

Since I've been 'off topic' in some recent posts. I thought I'd share some Elliottwave Analysis for the XAO Short, Medium and Longer Term trends in one file.

https://www.aussiestockforums.com/forums/showpost.php?p=358838&postcount=5586

Since there's was some good discussion after the XAO post above which covered possible short to long term targets - with a long term target of 1500 points or below as a strong possibility under the current elliottwave count.

Just so there's some context to some of the global markets - this chart (if accurate)...

http://www.stocktiming.com/Shanghai_Daily_Stock_Market_Updates/shanghai-index-update-friday.htm .

...of the Shanghai index gives an example of some of the declines that markets around the world are currently experiencing. An interesting decline considering china is the manufacturing powerhouse and many people I meet consistently point to China, India or Russia as being the backup to the global economy. It will be these countries that will suffer considerably in a recession as the services (India) or the manufacturing orders (China) will no longer be plentiful.

 

[MRC & Co]

Re: XAO Analysis

Did your chart and analysis also note the wild behaviour and giant bubble that developed in the Shanghai Composite? I think it did, but that part is extremelly important in the relativity stakes.

Interesting you point to fundamental reasons this time.

 

[OzWaveGuy]

Re: XAO Analysis

Did your chart and analysis also note the wild behaviour and giant bubble that developed in the Shanghai Composite? I think it did, but that part is extremelly important in the relativity stakes.

Interesting you point to fundamental reasons this time.

Sorry MRC didn't have access to a longer term chart in semi-log scale that would show a better picture - the bubble you mention is 'out-of-context' without the bigger picture. The declines still represent current social mood in china, the difference being over-invested sectors will be hit quite aggressively.

Investors have been cycling through many different sectors from stocks, to housing to Oil, to Gold etc as part of a topping process which has recently completed. This large process is simply a reflection of positive social mood turning to negative.

 

[tcoates]

Re: XAO Analysis

Ummm. But with the Shanghai index, the value more than tripled over the space of a couple of years. I think that events were unique to cause the value of the index to triple.

Look at charts on Yahoo...

http://finance.yahoo.com/echarts?s=...=on;ohlcvalues=0;logscale=on;source=undefined

If the XAO were to do the same as per the Shanghai index (from start of 2006 to end of 2007), then our top would have been 13000+.

But it got NO WHERE NEAR THAT VALUE.

Not sure of source, but such steep rises are bound for large(r) falls. But many charts will show you this.

I dont think the comparison is really fair.

Tim

 

[CamKawa]

Re: XAO Analysis

Sorry MRC didn't have access to a longer term chart in semi-log scale that would show a better picture - the bubble you mention is 'out-of-context' without the bigger picture.

Maybe a linear will do?

 

[MRC & Co]

Re: XAO Analysis

But are you not saying China fell from 6000 to 1700, meaning the XAO could see similar figures (a strong possibility you say) based on current sentiment having turned negative?

You posted the Shanghai Composite chart to give some 'context', which IMHO, it clearly does not. One had greed FAR in excess of the other market, hence, saw far more fear.

The only context is what is currently being seen, with Shanghai being decimated and the XAO above 4000.

Not going to 1500 based on current sentiment. And it is far from a strong possibility (probability) IMO.

Agree with Tcoates, unfair comparison.

 

[tech/a]

Re: XAO Analysis

3200 is (A strong possibility) and that's 50% of the 6880 top.
Then its just another 50% of that.
This hasn't unwound yet not even close.
Companies haven't even started to find things tough yet.
Demand is only now starting to come off the boil.
After Xmas it will be so quiet you'll hear a pin drop.

Companies will be going into liquidation not just banks.
Reporting time will be time to fear rather than to look forward to better figures and a stronger price in stocks.

I wouldn't be so sure that its an impossibility!

 

[MrBurns]

Re: XAO Analysis

3200 is (A strong possibility) and that's 50% of the 6880 top.
Then its just another 50% of that.
This hasn't unwound yet not even close.
Companies haven't even started to find things tough yet.
Demand is only now starting to come off the boil.
After Xmas it will be so quiet you'll hear a pin drop.

Companies will be going into liquidation not just banks.
Reporting time will be time to fear rather than to look forward to better figures and a stronger price in stocks.

I wouldn't be so sure that its an impossibility!

You're not the only one that thinks that way -

https://www.aussiestockforums.com/forums/showthread.php?t=13296