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XAO Technical Analysis

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3900 to 3819 highly likely today

Looking for volume in all indexes to mark a short term exhaustion of exasperated and concerned investors.

Then a rally which I expect to be shallow before a resumption towards GFC lows.
 
tech/a said:
3900 to 3819 highly likely today

Looking for volume in all indexes to mark a short term exhaustion of exasperated and concerned investors.

Then a rally which I expect to be shallow before a resumption towards GFC lows.
Click to expand...

Tech/a,
During Lehman crisis we did have rallies of 500 points though. I assume now you envisage no more than a 23.6% Fibonacci retracement, and therefore maybe a rally of around 200-250 points... ? (not good at this, just counting the drop from around 5000 area...)
 
tech/a said:
3900 to 3819 highly likely today

Looking for volume in all indexes to mark a short term exhaustion of exasperated and concerned investors.

Then a rally which I expect to be shallow before a resumption towards GFC lows.
Click to expand...

I agree. Basically nothing has happened since this time in 2008, except for governments spending trillions on demand substitution. We are where we were: deja vu all over again.

My multi-year TA says that April 2010 and April 2011 are double tops, and together they are a 'lower high' (~5000) than October 2007 (Nearly 7000), looking for a 'lower low'. April 2009 is an unnatural pattern reflecting artificial stimulation by governments on a scale never seen before. The true pattern should have looked like early 1988 where it took up to 3 years to build a base for a proper recovery.

So now we face returns to the 3200-3500 region (or even lower) for a prolonged period, because (a) there is no longer the capacity of governments to stimulate (b) there is no housing market to inflate again (c) there is no-one left to take on new debt (d) so much money has been lost (and is yet to be lost).

I'm mainly cash for a while yet. TLS dividends are looking good.
 
That's the bounce done, IMO. Back down we go from here. Lock in your profits and set your shorts.

The large and unusual gap on 5/8/11 would be very difficult to fill.
 
Gringotts Bank said:
That's the bounce done, IMO. Back down we go from here. Lock in your profits and set your shorts.

The large and unusual gap on 5/8/11 would be very difficult to fill.
Click to expand...

Hi Gringotts,

Why are you thinking that the bounce is over?

I was thinking that the bounce has been overdone for the last couple of market days also as the fundamentals haven't changed with the problem countries (US and Europe) that started the last downturn a couple of weeks ago.

Currently its too volatile to set a short in my opinion as there could be another 200 points upside from here especially being earnings season.

I am definitely sleeping with one eye open on the Dow and getting ready to place a short on the next pull back.
 

Yes I tend to agree here.
I do expect ranges to contract.
Volume will be important.
Im sure the wise will be using up moves to un load.
Into the "wise" who are buying "bargains"
 
surfing, there's that big downward gap, as mentioned, and to fill that would signal a return of confidence which wouldn't match the sentiment I'm seeing in the media. That plus the specs seem to be running out of puff.

Traders are so damn quick and moody these days, I feel that in order to profit I have to try and pre-empt what might happen, instead of befriending the trend.

My
 
Gringotts, thanks for the response I have never tried to trade gaps so I cannot comment on this but I will read up on it and watch from the sidelines.

Tech your spot on with volumes being the key.
 
Back to the drawing board. Gap will be well and truly closed today. Sorry bout that.

Will sell my one and only remaining stock today, MPO.
 
tech/a said:
Yes I tend to agree here.
I do expect ranges to contract.
Volume will be important.
Im sure the wise will be using up moves to un load.
Into the "wise" who are buying "bargains"
Click to expand...

tech/a - Thank you for your "wise" counsel. I do feel as though it's all a bit of a game really. The media are acting as though the drama associated with the European debt crisis is so last week and everything is now smooth sailing. I must say I've had an itchy trigger finger that wants to buy because it now seems safe to do so. But, I will keep my cash (or what's left of it).

Things are so volatile, it's almost as though the only bargains to be had are those available on last day that everything is getting smashed in order to make a profit - ie think buying BHP at $35. But, good luck picking that last day.
 

The media knows no more (most likely nothing) about anything.

They don't reveal European debt crises and sub-prime crises which the market reads in a newspaper and then acts on.
They see a falling share market and make up a likely story to go with it, over the last few days the market has been rising but they can't find a good enough story out there to go with it!

As far as I can tell the only thing that makes share markets go up and down is the people doing the buying and selling, the rest is just to print headlines and spread fear/euphoria.

So just because the media isn't warning us all of impending doom, that doesn't mean it's not there, it just means the share market didn't fall yesterday.
 

Struzball.
Actually the media is warning us. Most people are reading about someones interruption of the market volality.

What needs to be read is business.
HSBC to reduce 30,000 jobs world wide.
Retail stores closing.
Jobs being lost everywhere.
Unemployment going up (officially). Do not be fooled by the 5%. Its actually 10 - 15% but is being covered up by equating part time jobs equally with full time jobs.
So the media is warning us, but with a subtle slant.

Joe Hockey asked the question to Swan, if the economy of the country is so good, and almost record unemployment, why can you not guarantee a surplus by 2012- 2013.
He did not get a straight answer. The noose is gradually closing around Labor's money management.

The "Convoy of discontentment" is obviously not subtle. Its in the governments face.
joea
 

Interruption or Interpretation? ;-)

But yes I tend to agree with you mate. There is a serious game of 'smoke and mirrors' being played out by Labor. There is some serious mismanagement happening in Australia's finances at the moment.

Unemployment is very high. Try looking for a job at the moment....very slim pickings. Basic jobs requiring a degree paying $50k on the Sunshine Coast are attracting upwards of 50 applications, so can you imagine the applications for non-educated jobs? You need to be seriously 'over-skilled/educated' at the moment to get a job, unless you work in basic community need type jobs (mechanic, chef, hospitality, teaching, nursing).
Good luck to us all during these crazy times!
 
The games played by our politicians are irrelevant. The markets (and the wealth that underlies them) are driven by what's happening elsewhere and the uber-dominant effect is massive debt (bad for debtors and government) and massive unrealised capital losses (bad for creditors and banks).

But I agree on the TA. So far this is a rerun of March 2008, with the same bounce and same decreasing volumes. If so, the peak will be up about 500 points and will take nearly 2 months to reach. I expect a shorter cycle, so the downturn should be starting in mid-late September. If the rest of 2008 plays out, then the 'real' crash could be close to the end of the year. And it could be a doozy.
 
As this chart has other analysis with it
I have attached it here.
I think in the foreseeable future IF we get an impulse move down TODAY of 120 pts or so
Then 3100 is highly likely.

If the index shows the resilience it has on the past 2 index "shocks" then this analysis maybe invalidated.(Trading above 4350)

 
A retrace on the dead cat bounce, however the cat used one of its' nine lives and is still clinging on. Fridays fall, in partial sympathy to the lead from overseas, did not achieve the level of fall in the first half hour of trading that it did earlier in the month.

The all ords mucked arround through the day ranging from 98 points down to 120 points down, then started to fall arround 2.30pm, consistant with the friday afternoon sell off.

This was particularly noticable with the finance sector where wbc for instance was trading in the vicinity of $19.85 for most of the session then pushed down to $19.51 before closing on $19.65.
 

Attachments

  • xao 2011-08-19.png
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tech/a said:
I think in the foreseeable future IF we get an impulse move down TODAY of 120 pts or so
Then 3100 is highly likely.
Click to expand...

By my reading the index dropped 130 on open, recovered about 30 points and finished down 148. Sounds to me like it met your criteria (which I don't fully understand).

The chart reads as a primary down trend, with lower highs and lower lows. Surely the only serious question is: how low can it go?
 
I find it a bit unusual that SPI is flat and not following the overseas trend. Or just the calm before the storm....maybe open flat and drop later on Monday afternoon...
I like tech/a target at 3100, wondering though how the annual Fed meeting may interfere with the TA.

cheers,
 
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