XAO Technical Analysis

[theasxgorilla]

Re: XAO Analysis

Shame for our markets, I thought the hold above 6450 was pretty bullish short term.

I thought the same thing. Although what threw me was that my portfolio gained about 4% on Thursday and did nothing on today's technical breakout. I haven't delved into it yet to try and figure out which shares drove todays breakout. Nothing to do now except hurry up and wait for Monday

 

[Nick Radge]

Re: XAO Analysis

Here is the seasonal pattern for July. Looks like sideways to down on all time frames from today till month end...

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[Trembling Hand]

Re: XAO Analysis

Hmm... the xao closed at 6421.8... pretty much right on the resistence line. Given that today is Friday, and the upwards movement towards the end of the day, I would like to say that we are taking off. But then, I guess it pretty much depends on the US now, as there are hardly any news to come by in Australia as we slowly move into the profit annoucement season.

I would think the waiting for the news to drive the market higher can get you in all sorts of trouble. I would not be surprised when the likes of BHP report they sell off once their good news is out.

Shame for our markets, I thought the hold above 6450 was pretty bullish short term.

I am often surprised about comments like this. I really don't know how you trade/invest, for all I know you could be blowing the doors off, but it seems a lot of people’s outlook on the market depends on what happened last night in the US. We are continually getting Bearish to Bullish back to Bearish comments on every swing and turn in the US. I would think the right approach would be more like asxgorillas approach. Delve into the price action in OUR market.

I haven't delved into it yet to try and figure out which shares drove todays breakout. Nothing to do now except hurry up and wait for Monday

Which I see as some welcome leadership coming from the Financials the last week or more. Especially as the sell the good news season starts soon with the Materials reporting. They are looking a bit toppy if some other stocks can take leadership as they pull back/ consolidate we will still break to new highs.

 

[Sean K]

Re: XAO Analysis

Here is the seasonal pattern for July. Looks like sideways to down on all time frames from today till month end...

I was aware of this seasonal sell off but wasn't sure if it related to Aussie stocks, and hadn't seen a chart. Is this XAO or DJI, or does it matter?

How's August look? If it's a positive month, then topping up on long term holdings on the dips in this sell off (if it continues, or happens for us) might make sence for 'investors'. Or, it may be a more confident entry point for 'traders' perhaps?

(yes, I know exits are more important Niz : )

 

[Sean K]

Re: XAO Analysis

I am often surprised about comments like this. I really don't know how you trade/invest, for all I know you could be blowing the doors off,

You're suggesting that the US doesn't influence the Australian, or any other, market?

 

[nizar]

Re: XAO Analysis

You're suggesting that the US doesn't influence the Australian, or any other, market?

I think hes trying to a get us to invest/trade with a more longer term view.

Or, it may be a more confident entry point for 'traders' perhaps?

What do you mean exactly?
More confident entry point to buy what?
The index? Or bluechips?

Im personally not fussed what the index does, sometimes i dont check what the broader market is doing. I just focus on my stocks and on individual stocks.

 

[gfresh]

Re: XAO Analysis

We do take some cues from the US at points, however we don't blindly follow every single move..

blue = ASX200
red = SPX (US S&P500)

1st is 1 year, 2nd is 5 year..

It's possible the spread may become larger unless the US can pull out of their issues somewhat, and as long as our resources boom, and strong retail spending keeps things ticking.

 

[Nick Radge]

Re: XAO Analysis

kennas,
that seasonality shown is the XAO. I now have a new toy that can calculate any stock or index on 3 separate time frames then plot them. Combined with the Elliott Wave and volume analysis it offers extra confluence.

The correlation to the US is interesting. You will find that Australia has tended to move away from the US moves over the recent years unless the US moves >1%. The correlation jumps to 92%.

 

[Trembling Hand]

Re: XAO Analysis

You're suggesting that the US doesn't influence the Australian, or any other, market?

I’m surprised that people go from Bullish to bearish so quickly based on the US overnight action. I think the little Aussie market and some other Asian markets actually lead moves. Rather than always following the US like a lot of people seem to think. A lot of yesterdays moves in the US are just that, yesterdays moves.
For example on the 18th the US was down nearly .5% but the next day, only 4 hours later, we opened up and went higher. Then that night the US Followed, Yes there you go I said it the US follow our move. In fact I mentioned it in my blog for three days we lead the US moves. Its not always that way, but the blind statement that we follow the US is just WRONG.
I trade the SPI intraday, have for a while, a lot of my trades come from fading the initial reaction on the open to the US because many times they only matter for the first 15 minutes. If you brought the Aussie open to sell on the close because of an up day in the US or the opposite for a down US you would be Toast. On a bigger time frame have a look at the big hits we have taken and think about what were the drivers, the US was not the first market to take hits. Think recent China meltdown in Feb, Commodities meltdown March 06 etc.

 

[Trembling Hand]

Re: XAO Analysis

kennas,
that seasonality shown is the XAO. I now have a new toy that can calculate any stock or index on 3 separate time frames then plot them. Combined with the Elliott Wave and volume analysis it offers extra confluence.

The correlation to the US is interesting. You will find that Australia has tended to move away from the US moves over the recent years unless the US moves >1%. The correlation jumps to 92%.

Nick
Can you do intraday correlations? For example I would love to know the correlation between the XAO/XJO afternoon session (the start being say 2 pm to the close) and the US open session to see how predictive our market is. Rather than reactive as so many think it is.

 

[krisbarry]

Re: XAO Analysis

I am out of the market for a few days, so I wouldn't mind a correction, I hope that you could all help me out with my request...It only takes a slight global sell down

 

[Awesomandy]

Re: XAO Analysis

I’m surprised that people go from Bullish to bearish so quickly based on the US overnight action. I think the little Aussie market and some other Asian markets actually lead moves. Rather than always following the US like a lot of people seem to think. A lot of yesterdays moves in the US are just that, yesterdays moves.

It's a bit of both, I think. When there's nothing much happening here or in Asia, we look at the US. Similarly, when there are nothing much there, they look at Asia/Europe for directions. A little bit like a dog chasing its own tail, if you ask me, and this will continue to happen until some news break out somewhere, then some markets would go up/down/whatever and the rest of the world would follow if that news has any kind of relevance to their local conditions.

Anyway, back to the XAO. It certainly doesn't look very good for our Monday opening at this stage, so perhaps the break would have to wait another day. Although it now appears that I'm much better at looking at stocks directions rather than index directions.

 

[wayneL]

Re: XAO Analysis

I’m surprised that people go from Bullish to bearish so quickly based on the US overnight action. I think the little Aussie market and some other Asian markets actually lead moves. Rather than always following the US like a lot of people seem to think. A lot of yesterdays moves in the US are just that, yesterdays moves.

So new highs in Oz on Monday ya reckon?

If on Monday, the SP500 goes 60-100 points in the tank, you don't think Tuesday might be a bad day on the ASX?

Institutions are global and it is not individual markets who lead or follow, rather, it's these global instos who lead. "Where" a move originates from is virtually irrelevant, it's "who" is leading the move.

So these days the place that leads a move can be anywhere.

 

[>Apocalypto<]

Re: XAO Analysis

Agree and diagree Wayne.

we do follow the us at times and other times we move in our own way. look at when the us broke out and made three rises in a row we did nothing at all apart from weaken futher.

but on the same token we will follow on other days. i treat the US and other markets as a influence and nothing more.

But for sure Monday could get interesting with a very negative start on the SPI and our very aprehensive push above 6400. I sold my iGxjo contract last night seeing that fall on the US. to me that did not seam a normal reaction, I want to see how the us players react to that fall and how we look at this new influence.

but bye the way we have been acting in the last week may rise on Monday.

metals are up oil down a touch so the miners have support from that area, but from what i have seen in selling rushes (if we get one) not many sectors if any are safe on open.

 

[wayneL]

Re: XAO Analysis

Agree and diagree Wayne.

we do follow the us at times and other times we move in our own way. look at when the us broke out and made three rises in a row we did nothing at all apart from weaken futher.

but on the same token we will follow on other days. i treat the US and other markets as a influence and nothing more.

But for sure Monday could get interesting with a very negative start on the SPI and our very aprehensive push above 6400. I sold my iGxjo contract last night seeing that fall on the US. to me that did not seam a normal reaction, I want to see how the us players react to that fall and how we look at this new influence.

but bye the way we have been acting in the last week may rise on Monday.

Ah yes,

But there is the "what". ASX is a resources market predominantly. If "they" are buying tech, for e.g., it won't show up in the ASX etc.

 

[>Apocalypto<]

Re: XAO Analysis

Ah yes,

But there is the "what". ASX is a resources market predominantly. If "they" are buying tech, for e.g., it won't show up in the ASX etc.

Damn true Wayne,

that we are. it's a hard one for me to try to call we made a text book strong break out on high volume on the xao chart but we really struggled to do it and on Friday it was a whipey day with out much true drive till the last 30 min.

so with all of that i was hard for me to take a line on that long i am really 50/50 on Monday but like i said there is a hefty defect on the spi to bring us in. also on my watch list most of my top 20 shares did not show much conviction on Friday.

 

[Uncle Festivus]

Re: XAO Analysis

As per gold thread, I'm expecting some negative bias to resources, $AU and XAO, XJO generally?, next week based on some intervention in the $US and the implications for commodity prices.

It doesn't help that the XAO, XJO tried very hard Friday to break out but it looks like another flat to down week ahead if based on resources, unless an X factor appears eg takeover.

Banks also tried hard but only soon to be x div CBA really delivered.
Can anybody put some positive spin on this market that can possibly drive it onward & upwards??

 

[wavepicker]

Re: XAO Analysis

Post #603 was EW chart of the DJI. It may as well have been the XAO as the pattern was similiar. Both imply a test back down to the base of the consolidation (Wave 4). In the case of the DJI that is a drop of 700 to 800 points at a minimum. In the case of the XAO I should think this would be back to 6200??

The date off this high on the DJI was suppose to be on the 16th July( as I am primarily working from an SP500 chart and that did top on the 16th. The DJI did one day later ( a bearish non confirmation)

So plenty of scope for a move down here and opportunities for trades on the short side next week.

Cheers

 

[theasxgorilla]

Re: XAO Analysis

Or, it may be a more confident entry point for 'traders' perhaps?

(yes, I know exits are more important Niz : )

Not necessarily...depends on whose persuasion you go with, and what you're trying to buy. Buying for dividends for example, you might be satisfied with the increased yield during a dip...if you never intend to sell.

Apologies for momentarily being off topic.

 

[Sean K]

Re: XAO Analysis

but the blind statement that we follow the US is just WRONG.

Did I say 'blindly follow'? By the look of the last fews years charts, you could say 'generally follow' perhaps. Check the XAO and DJI 2 years. As has been metioned however, global action can influence any market, but the US has been the 'global action' for some time perhaps. The US following a rumour on the Chinese trading floor is only a very recent anomoly.

What do you mean exactly?
More confident entry point to buy what?
The index? Or bluechips?

The best time to buy anything is during a correction in a long term bull market, IMO. As long as it's in the sector driving the bull perhaps. At the moment I would have to consider any pull back/correction in the materials sector in Australia to be a great opportunity to top up, unless the long term bull is over, which I don't believe it is right at this moment. Chindia is going to be buying our metals for another 10 years, at least. This is more of an 'investment' approach though, Niz, and not a very short term trading approach such as buying on breakouts to all time highs. Different courses for different horses.

Just my impressions.