Australian (ASX) Stock Market Forum

XAO Technical Analysis

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KH, continuing on with our convo about the 10 day view.....be good to see a regular posting on this and your thoughts if you care to take the time once a week or f/n......it makes for good perspective, imho.....

i notice the thread has a few search engine eyes-on recently and am sure a few are keen to keep upto date with this stuff

first time viewers should consider adding their names to the ASF list :)
 
I am currently out of the market.

7/12/12

Risk Premium.png

It's been a long time since equities have looked this good relative to the risk free cash market. Given the RBA's cut this week retail is once gain being encouraged to jump into the market as the reward for taking on risk is now at nearly 2.00% (unfranked), almost where it was at during the GFC low and we all know the bounce we saw from that.

Market Breadth 71212.png

I think today was a bit of a weird one as given the price action earlier in the week many would have been expecting at least a pullback, then we have a strong open and bang go the shorts and all of a sudden we are through the short term resistance.

Joules Spoke last week about the internal distribution and the divergence in the market breadth which eventually led to the hard sell off half way through October. Since then we have had a very hard bounce and are now back near the recent highs in October. On a shorter basis I think the market breadth has effectively 'recycled itself' as the big players were probably able to distribute before the fall and then jumped back in near the 4350 mark and prepped themselves for another short stint. Maybe we will get that Xmas rally after all?

On a longer term basis it's the same story though. More and more money going into less and less stocks which can't be a good sign. The ASX200 is weighted very top heavy and as such it may take a while to play out but surely there has got to be a change to the status quo at some stage.
 
white_goodman said:
so you saying if it doesnt go up its bearish?

that area doesnt look like an area whatsoever to me
Click to expand...
WG, back here I was saying 4400 ish looked like the bottom of an 'area'. It did manage to take that back pretty quickly and then run. Pretty positive move really.
 
I have no access to news at present.
Did something just happen?
Market just shot backwards after being strong all morning
 
Dow Jones chart, but influential for the XAO.
A big fall in the latest session, and now threatening the 200 EMA (distortion in a 3 month chart - only 90 days).
INDU_Dec12_2.jpg
 
Spent a bit of time on this looking at the Daily (Micro) and Weekly (Macro) analysis.

It fits well in both time frames.
Its possible the Fiscal issues in the US of A may take sometime to grab.
As such its likely the patterns could play out.
I really think a BULL TRAP is a high probability.

Click to expand

Daily

XAO Dec Daily.gif

Weekly

XAO Dec Weekly.gif
 
Tech/A, lines drawn on charts can be so arbituary. The following is also just a price channel which I prefer showing a rise above the channel, a potential breakout from the channel...

xao30-12-12.gif

My channel appears to intersect more points than yours, does that make it more reliable? Never really bothered with channels personally.
 
brty said:
Tech/A, lines drawn on charts can be so arbituary. The following is also just a price channel which I prefer showing a rise above the channel, a potential breakout from the channel...

View attachment 50168

My channel appears to intersect more points than yours, does that make it more reliable? Never really bothered with channels personally.
Click to expand...

Can you provide some volume on your chart, brty.

gg
 
brty said:
Tech/A, lines drawn on charts can be so arbituary. The following is also just a price channel which I prefer showing a rise above the channel, a potential breakout from the channel...

View attachment 50168

My channel appears to intersect more points than yours, does that make it more reliable? Never really bothered with channels personally.
Click to expand...

Like all analysis it will be proven correct or in correct.
Semantics of correctly drawn lines are of little meaning I have found.
Point is we have a ranging market on a very slight rising bias.
If you were trading it you would either be looking for a breakout
of a channel or be long in a breakout of a channel and with a stop at or below the channel.

But long term I see a great short of around 1500-2000 ticks coming up this year.
 
GG, same volume as on Tech/A's chart, they are the same chart with different lines drawn. Both being XAO.
 
XJO continues on its merry way

XMJ and XFL both posting a higher high

Also the XSO with a VERY long range up bar to break through recent resistance.

All on daily charts

Not sure how to interpret the (lack of) volume.

Apologies for no charts I have no time.
 
Tech/A, apologies, I did not see your reply earlier.

Semantics of correctly drawn lines are of little meaning I have found
Click to expand...

Agree entirely, I was just highlighting that the same data can have different interpretations.

On this topic though..
But long term I see a great short of around 1500-2000 ticks coming up this year.
Click to expand...

If you refer to ticks here as being points on XAO, I'd like to know your reasoning. I have a different perspective in that a large rise this year is possible. I base part of my reasoning from the following data from Wren Research. It being the All Ords or its closest equivalent backdated for over 100 years.

http://www.wrenresearch.com.au/download/files/mxaoi.csv

Since 1900, the AOE (All Ordinaries Equivalent) has never failed to make a run for the previous high within 6 years of the record high. In 1929 the high of 52 was passed in 1934, in 1951 the high of 139 was passed in 1957 when the high reached 140, in 1970 the high of 431 was approached in 1973 with a high of 422 followed by being passed in 1979 with a high of 479. Even the 1987 high of 2249 was approached in 1993 with a high of 2174, before the double top in early 1994 of 2260.
So the question is whether the economic conditions in this country are worse than at any time in the last 113 years? To that question I can only answer no.

Coupling the historic perspective with the declining interest rate environment, plus the relatively high dividends available, with franking credits, then it is easy for me to see a large rise in our market this year, especially as no-one is expecting it.
 
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