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XAO Technical Analysis

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The lows appear to be getting higher however the highs appear to be having problems breaking back above 4425.

The Euro factor is dragging out. It seems the Europeans are waking up to the reality that breaking up the euro and returning to individual currencies would have long term disastrous results. Knowing that they need to work out their problems and knowing how to go about it are two different things.

xao 2012-01-06.png

Recent volumes are probably unreliable to use as the basis for longer term investment strategies or forming any opinion as to where the xao is going in the near future.
 
Well it's been hard for Aus producers to compete in the market (look at BSL, OST, etc and the recent Heinz factory close)

I would say that XAO is bearish in the short term perhaps until these producers can produce offshore

my :2twocents

edit:
oh and remember carbon tax = more cost = less profit = share prices go down again
 
nulla nulla said:
The lows appear to be getting higher however the highs appear to be having problems breaking back above 4425.

The Euro factor is dragging out. It seems the Europeans are waking up to the reality that breaking up the euro and returning to individual currencies would have long term disastrous results. Knowing that they need to work out their problems and knowing how to go about it are two different things.

View attachment 45732

Recent volumes are probably unreliable to use as the basis for longer term investment strategies or forming any opinion as to where the xao is going in the near future.
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Just wondering what other people's view is regarding the chart you posted and where the market is going to go.

I personally see it as an ascending triangle in a downtrend, and on low volume I would tend to think that it would represent a continuation pattern, and it will break to the down side.

There is also a chance that it can be a reversal pattern and it can break to the upside, though I could see it happening only on increasing volumes.

cheers,
 
whitefang said:
I personally see it as an ascending triangle in a downtrend, and on low volume I would tend to think that it would represent a continuation pattern, and it will break to the down side.
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think its more like this personally - could go either way

54758.jpg
 
Edwood said:
think its more like this personally - could go either way

View attachment 45756
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I tend to become more optimistic myself, Edwood;
If I can't quite get a handle on the pattern - continuation? reversal? - I like to look at the relative momentum, for which I use MACD with a shorter set of parameters. Having done that 2 years ago, the Bearish Divergence from September 2009 across April 2010 was definitely over when MACD rose above the extension.
Yes, that's hindsight. But the Lower Highs - Higher Lows pattern of the main chart around the middle of 2010 looked similar to the current "indecision" - and broke to the upside as MACD terminated the Bearish Divergence.
Fast forward to Feb-Apr 2011, and we have again a Bearish Divergence that is followed by a pattern we're not quite sure yet about. But again, MACD has terminated the Divergence line, which increases my confidence that the next move should be up again.

AllOrds w 10-01-12.gif
 
Quite a good argument here, pixel.

Personally I would be more optimistic if I could see some volumes/positive OBV (though I take into consideration the fact we have just gone through a quiet period of the year).

cheers,

pixel said:
I tend to become more optimistic myself, Edwood;
If I can't quite get a handle on the pattern - continuation? reversal? - I like to look at the relative momentum, for which I use MACD with a shorter set of parameters. Having done that 2 years ago, the Bearish Divergence from September 2009 across April 2010 was definitely over when MACD rose above the extension.
Yes, that's hindsight. But the Lower Highs - Higher Lows pattern of the main chart around the middle of 2010 looked similar to the current "indecision" - and broke to the upside as MACD terminated the Bearish Divergence.
Fast forward to Feb-Apr 2011, and we have again a Bearish Divergence that is followed by a pattern we're not quite sure yet about. But again, MACD has terminated the Divergence line, which increases my confidence that the next move should be up again.

View attachment 45758
Click to expand...
 
IMO the xao is going to trade between 4450 and 4100 for a little while longer. The xao appears to be running up on the euphoria linked to the current U.S. reporting which is showing to be slightly better than analyst expectations (even in the instance of Alcoa, where the loss was less than expected).

A break and hold above 4250 would encourage me to think the xao could test 4450 again. Negative news out of Europe and China could just as easily trigger a fall and see us test the lower channel support line arround the 4140 level. If it fails to hold there then its back to 4040 or lower.

If Europe keep making positive noises about solving their problems and China isn't too tight with their internal money controls, Banking and Mining have plenty of scope to provide the drive to push the xao above 4450 into the 4500 - 4600 range. Further than that would be asking a lot in the current soveriegn debt focused period.

What ever happens, trade the volitility.
 
EW is on another thread...which is something I follow at times....
If I am not wrong, there was an expectation for a W5 to take the market to a new low.
Anyone can re-state at what point the count would be invalidated if market went up?

cheers,


nulla nulla said:
IMO the xao is going to trade between 4450 and 4100 for a little while longer. The xao appears to be running up on the euphoria linked to the current U.S. reporting which is showing to be slightly better than analyst expectations (even in the instance of Alcoa, where the loss was less than expected).

A break and hold above 4250 would encourage me to think the xao could test 4450 again. Negative news out of Europe and China could just as easily trigger a fall and see us test the lower channel support line arround the 4140 level. If it fails to hold there then its back to 4040 or lower.

If Europe keep making positive noises about solving their problems and China isn't too tight with their internal money controls, Banking and Mining have plenty of scope to provide the drive to push the xao above 4450 into the 4500 - 4600 range. Further than that would be asking a lot in the current soveriegn debt focused period.

What ever happens, trade the volitility.
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A look at the German DAX over the last year, on weekly data, the media being in a Euro calamity frenzy, hourly broadcasts of doom. Yet in fact the DAX has been in a weekly uptrend since Sept 2011.
 

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Focusing on the US CBOE volatility index, weekly VIX. Below 20 overnight, a magic number for techies who will be wondering if it predicts a year long rally in the Dow, under similar TA patterns during 2010-2011. But markets keep us guessing, and will continue to do so.
 

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The chart for recent activity on the XAO indicates that we have been moving sideways and upwards since August 2011. The trading since 02 January 2012 indicates a rebound from the lower channel area of 4100. The next level of resistance is arround 4380 and if we can break through that there is no reason we can't move further upwards in the channel to the 4450 - 4500 area.

xao 2012-01-20.png

But, yes there is a but, the trading since 02 January 2012 is relativley light and can easily be reversed when the professional traders and brokers come back from their annual Xmas/ New Year holiday, probably next week.

All of them keen to generate fees to cover their recent excesses and expenses. Harbingers of doom contacting all their clients, ranting about GFC2 and yelling "Sell Sell Sell". No doubt they will generate brokerages, push the market back down, then call their clients back yelling "Buy Buy Buy" so they can generate more fees.

Meanwhile the volitilty is maintained and the opportunities to trade the swings recur with consistant regularity. Gotta love the system.
 
With all the negative media about the world a lot of the downside must be factored in. Maybe. EU defaults are pretty much expected and the US debt clock has been getting lots of airplay. IMF statements of near doom have set the tone. pe ratios of the world market are below average confirming the above. So, with the market seeming to hold up in the short term and not in any tail spin just yet maybe there's more risk to the upside? Or, maybe there's something more shocking in store for world economies? Iran induced oil shock perhaps.

No change on the chart for me. Sideways at best until that 4400-4500 zone is cleared including 200d ma. If the higher lows support line broken more down side risk.

XAO.gif
 
Logique said:
A look at the German DAX over the last year, on weekly data, the media being in a Euro calamity frenzy, hourly broadcasts of doom. Yet in fact the DAX has been in a weekly uptrend since Sept 2011.
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Sorry, but I'd call that cherry picking end points. My reading is that the market crashed and has partly recovered, but the trend is down. I might change my view if there were a higher high, close to 7,000, but I certainly wouldn't want to buy any dips on that trend.
 
davo8 said:
Sorry, but I'd call that cherry picking end points. My reading is that the market crashed and has partly recovered, but the trend is down. I might change my view if there were a higher high, close to 7,000, but I certainly wouldn't want to buy any dips on that trend.
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7000 on the XAO, or DAX? Around 6400 on the DAX is the issue I feel.
 
davo8 said:
Sorry, but I'd call that cherry picking end points..
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Davo you've just described every chart in the thread. I'm happy for you to interpret them in any way that suits you. It's just information, and we all need that.
 
Logique said:
Davo you've just described every chart in the thread. I'm happy for you to interpret them in any way that suits you. It's just information, and we all need that.
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I don't think I'd agree, and I didn't see 'uptrend' as a fair description. The DAX bottomed in early 2009, but had been trending upwards until it dropped sharply in August 2011. It's still 1000 points off its highs and in many ways looks like 2008 before it fell off a cliff.

What you're seeing is investors betting that the recession won't be as bad as they feared, but the start of a sustainable trend this is not. As Chris Richardson is saying, there is 50-50 chance of 'Eurogeddon' and the chart reflects that.
 
This is an equity curve of a system I follow but don't trade. I follow it because it seems to reflect the mood of the market quite well. The arrow shows where the system started to lose money, Mar 2011 which was sort of a turning point for our market (cross below MA). What's encouraging is that it looks ready to trade again, because it's just nudging the MA (light blue) after a long time under it.

eq.jpg
 
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