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XAO Technical Analysis

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Re: XAO Analysis

I'm not sure it's an impossibility.

I'm sure EW (which shows current sentiment like most forms of TA if I am not mistaken), has no business forecasting such a movement, based on the assumptions it makes (sentiment readings).

You are talking fundamentals tech, which is what will be required (further degeneration of the economic climate), to push this market to 1500.
 
Re: XAO Analysis

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





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


dyor
motorway
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All they did is create adjustment of rules resulting in a mechanical system, ie: they made a black box. No ta there at all and no idea how to apply it.
Then again, you can't blame them for being academics.


Also, enough of the 1500 business. It's a target, may or may not get hit in the next 1, 2, 5, 20 years. Markets sell off on uncertainty of future conditions. Uncertainity means no investors... Personally I don't think its going to get to those levels regardless of what news comes out (unless its truly horrific and unexpected stuff like Japan sinks into the sea or something. US in recession is not gonna do much to the markets imo)
 
Re: XAO Analysis

tech/a said:
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!
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I agree mostly with this, but again, we're only going on what we think may happen. The truth is, no-one knows how low we will go, whether this will be a full blown out recession lasting years, or if it's just a slowdown and we go up from here.

Is there even proof Australia is heading for recession? From the figures released by the RBA today, they seem to still be talking about positive growth of 1.5%, that's hardly unexpected considering the stellar run we've had in the economy over the past few years. It's only natural to have a slow down, but predicting 1500 on the XAO based on what might happen seems a little over the top. :2twocents
 
Re: XAO Analysis

skyQuake said:
All they did is create adjustment of rules resulting in a mechanical system, ie: they made a black box. No ta there at all and no idea how to apply it.
Then again, you can't blame them for being academics.
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Just in case there are others who don't know what a BlackBox is

* Black boxes: Software systems that generate buy and sell recommendations through proprietary (undisclosed) algorithms. Investors using a "black box" are relying totally on the program. If the black box reasoning is wrong or unreliable, you won't know; nor will you have any control over the settings. You will also not be able to properly assess the level of risk in the program, and whether the risk matches your own risk tolerance.
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Some more on "magic numbers"


http://www.lhup.edu/~dsimanek/pseudo/fibonacc.htm


Fibonacci Foolishness.
A search of the internet, or your local library, will convince you that the Fibonacci series has attracted the lunatic fringe who look for mysticism in numbers. You will find fantastic claims:

The "golden rectangle" is the "most beautiful" rectangle, and was deliberately used by artists in arranging picture elements within their paintings. (You'd think that they'd always use golden rectangle frames, but they didn't.)
The patterns based on the Fibonacci numbers, the golden ratio and the golden rectangle are those most pleasing to human perception.
Mozart used f in composing music. (He liked number games, but there's no evidence he ever deliberately used f in a composition.)

The Fibonacci sequence is seen in nature, in the arrangement of leaves on a stem of plants, in the pattern of sunflower seeds, spirals of snail's shells, in the number of petals of flowers, in the periods of planets of the solar system, and in stock market cycles. So pervasive is the sequence in nature (according to these folks) that one begins to suspect that the series has the remarkable ability to be "fit" to most anything!

Nature's processes are "governed" by the golden ratio. Some sources even say that nature's processes are "explained" by this ratio.
Of course much of this is patently nonsense. Mathematics doesn't "explain" anything in nature, but mathematical models are very powerful for describing patterns and laws found in nature.

I think it's safe to say that the Fibonacci sequence, golden mean, and golden rectangle have never, not even once, directly led to the discovery of a fundamental law of nature. When we see a neat numeric or geometric pattern in nature, we realize we must dig deeper to find the underlying reason why these patterns arise.

The "golden spiral" is a fascinating curve. But it is just one member of a larger family of curves/spirals collectively known as "logarithmic spirals", and there are still other spirals found in nature, such as the "Archimedian spiral." It's not difficult to find one of these curves that fit patterns found in nature, even if those patterns are only in the eye of the beholder.

But the dirty little secret of all of this is that when such a fit is found, it is seldom exact, and considerable variations from the "golden ideal" are seen in nature. Sometimes curves claimed to fit the golden spiral actually are better fit by some other spiral. The fact that a curve "fits" physical data gives no clue to the underlying physical processes that produce such a curve in nature. We must dig deeper to find those processes.
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Of course much of this is patently nonsense. Mathematics doesn't "explain" anything in nature, but mathematical models are very powerful for describing patterns and laws found in nature.

Yes I think a lot can be revealed by measuring the actual
retracements ( The actual shape of clouds )---> reveals strength or weakness -relative--> changing behavior.

But very little in drawing various "magic ratios" ( the shapes we think we see / would like to see , in clouds )-- a nice quote on seeing such shapes in Talebs Fooled by randomness and the peril of doing so.


motorway
 
Re: XAO Analysis

tcoates said:
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.
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The interesting point to note on the shanghai index is: Back in November in 2007, If anyone had stood up and said the index would be 70% lower within a year, they would have been laughed off the planet.

And the fundamental analysts would have said - there's simply no fundamental reason for such a large decline (a correction of some sort - perhaps). Now that's it has happened - what were the fundamentals that drove it down hard so quickly - anyone? Considering the mainstream financial media and analysts of all sorts kept saying strong demand from china or strong domestic demand in china.

The best fundamental analysis I've seen is to try to match a set of fundamentals to the actual market action. The same way the financial media match the headline to the market. It can be seen time after time.
 
Re: XAO Analysis

Off my fundamental soapbox :)

As for XAO, One more small decline to approx 3850 should finish off wave d down on the wave 4 triangle. This would leave a small leg up (wave e) to finish off the structure at around 4100 - 4200. Once completed in the next several days, the ride down to around 3250 will be underway.
 
Re: XAO Analysis

During the great depression, stocks in the US dropped around 80%. It didn't happen in the first year, but took 3 years to do this. There is a definite precedent for this happening, and the current crisis has been likened to the depression in many ways.

Is 1500 points likely? I hope not as 20%+ unemployment is not something I would like to deal with. But it is not impossible. History has been there before.

I posted this link somewhere else before, but it shows the basic Dow chart during those years, but more interestingly some quotes from those of the time.

http://www.gold-eagle.com/editorials_01/seymour062001.html
 
Re: XAO Analysis

OzWaveGuy said:
The interesting point to note on the shanghai index is: Back in November in 2007, If anyone had stood up and said the index would be 70% lower within a year, they would have been laughed off the planet.
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Not really.

I remember talking to Magdoran about it clearly being in a bubble and the likely outcomes.

And that was much much earlier than November 07.
 
Re: XAO Analysis

frenzel said:
During the great depression, stocks in the US dropped around 80%. It didn't happen in the first year, but took 3 years to do this. There is a definite precedent for this happening, and the current crisis has been likened to the depression in many ways.

Is 1500 points likely? I hope not as 20%+ unemployment is not something I would like to deal with. But it is not impossible. History has been there before.
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No. Absolutely not. If the XAO was tracking the DOW it would have gone from under 1000 to nearly 7000 in just 5 years. Given that kind of bubble, a crash is possible. Without it, absolutely not.

In recent times the NASDAQ and Shanghai indexes have done something similar: bubble and crash, but not here. The XAO can go to low 3000s and it can stay there for years, but short of total meltdown to reach half that is impossible.

BTW I wish it would. A safe dividend yield of 20% sounds pretty good to me.
 
Re: XAO Analysis

motorway said:
Just in case there are others who don't know what a BlackBox is



Some more on "magic numbers"


http://www.lhup.edu/~dsimanek/pseudo/fibonacc.htm




Of course much of this is patently nonsense. Mathematics doesn't "explain" anything in nature, but mathematical models are very powerful for describing patterns and laws found in nature.

Yes I think a lot can be revealed by measuring the actual
retracements ( The actual shape of clouds )---> reveals strength or weakness -relative--> changing behavior.

But very little in drawing various "magic ratios" ( the shapes we think we see / would like to see , in clouds )-- a nice quote on seeing such shapes in Talebs Fooled by randomness and the peril of doing so.


motorway
Click to expand...

Yeh don't go too deep into it, its a useful too. Just do simple time and price retractments; Maybe some fib fans... But if you delve in too deep looking for order in chaos you'll go mad!

-------------------------------------------------------------


On another note, Today pretty much confirmed failure, and retest failure of trendline from 1992-03-now
 
Re: XAO Analysis

Just posted this on another forum. It's the XAO going back to 1875 (click on the attachment to get a larger image).

The black trend line was already on the chart, and I added the blue one, which I think is a better fit (making everything since the late 1970s pretty much part of an above-average bull run).

The time scale seems to be out a bit though, as it puts the recent high in late 2006 when in fact it was in late 2007.

GP
 

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Re: XAO Analysis

davo8 said:
The XAO can go to low 3000s and it can stay there for years, but short of total meltdown to reach half that is impossible.
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Sorry, but my point is that nothing is impossible. Who's to say that we are not in the midst of a global meltdown. In fact, I'd argue that we are in the midst of a global meltdown. If you'd looked at the link I posted, you would have seen similar quotes of enduring optimism whilst sitting on the decks of the titanic. Again, it has happened before, it CAN happen again.

Australia was actually one of the worst affected nations during the depression on the back of our wheat and wool exports at the time being completely destroyed. Worth a read.
Now we may have changed to iron ore and whatever resource we can eak out of the ground. Not too much has changed in our global position. Again I don't want to see the worst, but to say that something is impossible, is to have total disregard of history.
 
Re: XAO Analysis

OzWaveGuy said:
The interesting point to note on the shanghai index is: Back in November in 2007, If anyone had stood up and said the index would be 70% lower within a year, they would have been laughed off the planet.
Click to expand...


No they wouldn't have been. Numerous commentators thought the Shanghai market was ridiculously priced - there's a reason why its called 'the casino' and ridiculously out of whack with the same equities listed on the HK market.

I wonder if your 1500 call is an armchair call or if you actually have significant money riding on this. It's a remarkable prediction so if you actually believed in it being probable you could make some serious money if it came true.
 
Re: XAO Analysis

A slight correction to my last post, since I can't edit it now: I believe the black trend line was placed on the chart by the original poster, using an exponential trend line (effectively linear regression) in Excel.

GP
 
Re: XAO Analysis

What's interesting is that the financials have virtually led the markets down in each leg. They look to be moving through support now.

And most of the downside targets appear to be about 15-20% away from the current prices which also lines up with some of the downside targets on the XAO.
 
Re: XAO Analysis

Given all the gloom and doom on this thread a quick silly question. Has anyone been doing any buying lately?

Without going into any details and specifics of charts and analysis, to me the 10th October low in the DJIA and SP500 was quite significant.(At least for the last major leg down) I opened up some longs some weeks ago and have been using major retests to add a little more.

Time will tell if I am right or wrong. Knowing this could only be a 4th wave of sorts and i could be wrong, stops need to be kept very tight at the low sections of the retest lows.
 
Re: XAO Analysis

Only on a very short term basis.
I can only remember a few overnight holds in the last few months.
 
Re: XAO Analysis

IMO......... bounce due , trading accordingly , entrys on ANZ , MGX and in queue for anotherie , ALL low % loss on stoploss points ( one intends ) ... not a suggestion just pointin outr my guesstimations on the matter

avaniceday
 
Re: XAO Analysis

wavepicker said:
Given all the gloom and doom on this thread a quick silly question. Has anyone been doing any buying lately?

Without going into any details and specifics of charts and analysis, to me the 10th October low in the DJIA and SP500 was quite significant.(At least for the last major leg down) I opened up some longs some weeks ago and have been using major retests to add a little more.

Time will tell if I am right or wrong. Knowing this could only be a 4th wave of sorts and i could be wrong, stops need to be kept very tight at the low sections of the retest lows.
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Jumped in on ORG, IGR and OEL on the 31st Oct and jumped out of OEL and ORG yesterday just before market close. Was only really looking to recoup some previous losses in WPL and RIO so as soon as I put a dent in that I was back out.
 
Re: XAO Analysis

OK, who wants to take a stab at where the XAO will finish today? My guess is 3847 :)
 
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