Here is a chart of the XAO with a top secret, super duper divergence code: that has proven to be very reliable in the past.
It basically gives an indication of how many stocks are trending up or down based on - well that's the secret bit:
You can see how it picked up divergence before the last fall after making new highs in Jan.
While it is now telling me that less and less stocks have been participating in this rally and there is some underlying weakness in the market. It is also sending a bit of a warning that more stocks could be beginning to join in which could push us higher. Due to the nature of how this indicator is constructed there can actually be a bit of lag as stocks move into a position to be counted as trending up.
I certainly would not be shorting the market here with any sort of confidence, the market is in a bit of a strange phase atm and I'm having a bit of trouble having any real conviction either way but I do favour continued strength at this stage and my best guess is a move to around 5035-5050 this month and then review things from there if we make it. There is also a chance we could go towards 5160 this quarter.
The market will probably tank now that I've made my "prediction" so load up those shorts
And the first line of support at 4500 if it turns cacky today? How much longer can resources prop up the xao?
lol, right on cue the DOW has a down night.
I would have thought the first line of support could be 4800-4850 but there is obviously more major support at 4500 but imo it is a bit early to be calling 4500 again even though we could easily bounce off resistance and head straight back down to that level.
I would ideally like to see some consolidation now around these areas before an attempt at pushing higher but at the end of the day they are only lines on a chart and whether the market respects them or not is a different matter.
Some questions that I have: at what stage does the technical side of things become self-fulfilling, eg now that there has been the back off from resistance, will traders go "right, time to sell"? How far does the index have to move down from a test of resistance to make it significant? Or will this take another test and pullback, which would make the response even stronger?
Also, how much does the weight of numbers influence things, eg are the big players more likely to trade by TA and hence look to short as resistance is proved? Is it wise to try and jump in ahead of them?
Thanks in advance
Here is a chart of the XAO with a top secret, super duper divergence code: that has proven to be very reliable in the past.
It basically gives an indication of how many stocks are trending up or down based on - well that's the secret bit:
at what stage does the technical side of things become self-fulfilling
Greetings. Would that be the top 500, 200, 100 or 50 stocks weighting? I won't tell. Promise.
Okay thanks.The scan is run over the All Ords and has nothing to do with weightings.
I certainly would not be shorting the market here with any sort of confidence, the market is in a bit of a strange phase atm and I'm having a bit of trouble having any real conviction either way but I do favour continued strength at this stage and my best guess is a move to around 5035-5050 this month and then review things from there if we make it. There is also a chance we could go towards 5160 this quarter.
The market will probably tank now that I've made my "prediction" so load up those shorts
Okay thanks.
The code isn't really top secret I was just messing around.
It is based on a system/method I use to trade but I don't post much of it on ASF so it would mean nothing to most people and I couldn't be bothered trying to explain it. Those who have discussed my trading with me and know the method I use would probably have a fair idea of how it is constructed.
with an anouncement about revaluing the Yuan upwards to the USD expected soon.
Anyone got an estimate/prediction on how (much) a revalued Yuan will affect the Aus economy as distinct from the XAO?
I certainly would not be shorting the market here with any sort of confidence, the market is in a bit of a strange phase atm and I'm having a bit of trouble having any real conviction either way but I do favour continued strength at this stage and my best guess is a move to around 5035-5050 this month and then review things from there if we make it. There is also a chance we could go towards 5160 this quarter.
Don't count on it. Not being smooth anyway. They are stuck big time on this one. They need to do it eventually but how? Many small gradual moves is a signal to every hedgie to front run the Yuan/HKD and cause some real problems. It becomes a sure thing with unlimited trade size.
But if they do it in one big step back to somewhere around "real value" that will cause lots of problems inside China. Then outside the benefits of their extra purchasing power to buy our rocks will be upset by the extra cost of their products.
Very sticky situation. This could be a biggie
We have hit the 5035-5050 area this morning.
I want to see how the next few days play out now, especially today. There is a fair chance we will continue to get dragged higher due to the strength around atm.
I will up date the charts tonight.
Massive, MASSIVE, resistance area between 4800 and 5200. Massive. Could chop around here for some time perhaps.Now while it has played out to the exact pattern I was looking at (surprise, surprise) we are now nearing the major target zone I first flagged. This actually ties in a bit with my target of 5160ish. It will be interesting to see if that area does prove to be a key area.
While I'm updating charts I thought I would update my long term analysis that I posted a while ago.
Now while it has not played out to the exact pattern I was looking at (surprise, surprise) we are now nearing the major target zone I first flagged. This actually ties in a bit with my target of 5160ish. It will be interesting to see if that area does prove to be a key area.
Of course a retest of 3700 seems unlikely now, while not impossible it is unlikely at this stage. I would expect a retest of 4400-4500 at some stage though, maybe as far as 4000.
As a not there is quite strong divergence on the weekly which is interesting but I have not done any testing on that indicator on the weekly time-frame so it might mean absolutely nothing.
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