XAO Technical Analysis

[Logique]

For the XAO, not hit as hard as the US in the past week, the benefits of being a perennial laggard I suppose. The chart under is actually the US DJIA, but don't kid yourself that it won't affect the XAO.
The Dow isn't a Bear yet, and I haven't seen any predictions that it will roll over in 2018. For subsequent years ..yeah we need to look at that, so many factors to consider.

So for now, I'm thinking so far, the US in a Bull market correction. It was technically near term overbought, let's face it.
One year chart, but this is President Trump in residence.

 

[gartley]

World markets looking quite sick ATM. Closer to home our index which is heavily weighted with bank stocks which have been in decline for a while now, look like they will accelerate this decline in the weeks/months ahead with the main ones exhibiting longer term descending triangle formations following the completion of long term impluse waves

 

[InsvestoBoy]

I'm horrible at technical analysis.

Whatever prediction I make, probably the opposite will happen.

Anyway, I was looking at the monthly chart and noticed a similarity between the recent price action and the 2013 price action when it was testing the 2009-2010-2011 resistance pattern.

In 2013 the price bumped up against the resistance pattern, it was shaky and even broke back below but led to a bumpy ~1000 point rise from there.

 

[Logique]

Sorry not enough stocks related postings from me lately. No better time than the present, with a big move in the market to make things interesting. Objective analysis can reduce any sentiment bias, and mostly helps.

So, a chart.. not with the sophistication of the Tech/a's of the world, but it will suffice for now. I think elevated volatility will be with us for a little while, at least until the US mid-term elections are completed during November. If the Democrat party gains a Congress majority, look out!
That said, this is just the personal opinion of one poster.

 

[Logique]

And one for the weekly Dow Jones over the same period. Will it hold at support/200EMA ? Battling head winds, and there's a case for technical divergence with the Jan 2018 high.

 

[tinhat]

I'm not really saying anything new here in terms of the current commentary on the market but it is worth checking out the position of the XAO on a point and figure chart. It is nearing a decision point as it is sitting at what was the resistance line during the first quarter of 2015 and also sitting near the bottom of the trend channel going back to early 2017. Depending on how you look at the chart, it could drop down below or around 5800 and still remain within the bullish channel started at the beginning of 2016.

 

[Triple B]

I'm not really saying anything new here in terms of the current commentary on the market but it is worth checking out the position of the XAO on a point and figure chart. It is nearing a decision point as it is sitting at what was the resistance line during the first quarter of 2015 and also sitting near the bottom of the trend channel going back to early 2017. Depending on how you look at the chart, it could drop down below or around 5800 and still remain within the bullish channel started at the beginning of 2016.

View attachment 89759

Have you done a count? did it reach the first target ? I need to re learn the count

 

[tinhat]

Have you done a count? did it reach the first target ? I need to re learn the count

Box size is 50 and reversal is 3x on the above chart. I am not counting from a pattern on the above thoughts but just eyeballing the trend lines on the P&F.

 

[Triple B]

OK thanks. will set mine up the same . need the practice

 

[tinhat]

OK thanks. will set mine up the same . need the practice

I'm not a very proficient user of T/A. The charting tool I use auto-selects the box size. There is a thread about P&F charting on these fora which was moderately active some time ago. I really just eye-ball charts to help in identifying trend and timing buying and selling stock picks based on bottom-up FA.

 

[Triple B]

All good . had to re- count still came up with low 9000s
If you look at the last weeks action on P&F chart it looks very normal. still bullish

 

[tinhat]

View attachment 89769 All good . had to re- count still came up with low 9000s
If you look at the last weeks action on P&F chart it looks very normal. still bullish

TrippleB, a couple of observations about the charts you posted.

I'm not sure that a box size of 1 is meaningful for the XAO in proportion to a price value within the range of 6000. With the disclaimer made above that I am not really a T/A person, I vaguely recall reading that the box size should be around 2% of the price give or take a large margin. Box size and reversal multiple are very arbitrary decisions for the chartist to make, especially if plotting a chart over time when there will be significant range in price (hopefully to the upside over the long run) . I reckon someone using a reversal of 1x versus 3x would be looking for different patterns and counting methods.

My understanding is that P&F charting grew out of tape reading. In this regard I can understand how P&F could be a tool seeking to discard the noise and amplify the signal from the course of trading in a stock. Yet here are people like me looking to cutely apply it to a market index over a multi-year period, perhaps using the idea that patterns in nature recur in a fractal manner along a time scale.

P&F aims to remove noise from the trend (and trend reversal signals). This is especially so for sideways movements. The cost of that is that time is also removed as a factor. Time is not a constant on the x axis. Yet, time is money, especially in terms of opportunity cost: the lost opportunity to invest in bonds, etc and central to calculating net present value.

For me, given the above, and my earlier stated reasons for using P&F to eyeball a stock price in relation to its trend on the market, I'm not that convinced about using P&F counting methods to determine target prices is worthwhile for my style of investing. There is no one prescription as to how to size a P&F box and what reversal multiple to use. Given that I am not a T/A by breading, however, I have no empirical evidence one way or another. My targets are usually set based on F/A but entry or exit decisions may be further influenced around trend/momentul - well that is my strategy at least!

 

[notting]

Looks like she's gonna hold capt'n -

 

[Logique]

Nice Fibonacci retracements Notting. Within a pronounced area of previous resistance/new support (?) at todays XAO close 5760, so let's see.

 

[Triple B]

Tin Hat.
The box size of 1 in the top chart represents 100 points aprox 1.66% at 6000 points. more at lower points . ie @4000points 1box =2.5%
The price of the index moves 100 points before a box is filled.
the 3 box reversal means the price needs to have moved at least 300 points (aprox 5% before a new vertical row can be printed.
so you can look at it as a chart of volatility without time factored in.
lots of vertical lines within a horizontal range is 5% changes min. then add 1.66% per box . ie 6 boxes in verical row = 10% change.aprox.
from my observations the counting method seems accurate around 66% of the time .but only a small sample has been counted. mainly gold and ASX
bottom chart is 50 points per box and 150 points minimum per new vertical row and probably less useful
I can post a few charts with counts that include the ones that failed to reach target is you like. just give me a couple days.Busy on FX at the moment

 

[tinhat]

Tin Hat.
The box size of 1 in the top chart represents 100 points aprox 1.66% at 6000 points. more at lower points . ie @4000points 1box =2.5%
The price of the index moves 100 points before a box is filled.
the 3 box reversal means the price needs to have moved at least 300 points (aprox 5% before a new vertical row can be printed.
so you can look at it as a chart of volatility without time factored in.
lots of vertical lines within a horizontal range is 5% changes min. then add 1.66% per box . ie 6 boxes in verical row = 10% change.aprox.
from my observations the counting method seems accurate around 66% of the time .but only a small sample has been counted. mainly gold and ASX
bottom chart is 50 points per box and 150 points minimum per new vertical row and probably less useful
I can post a few charts with counts that include the ones that failed to reach target is you like. just give me a couple days.Busy on FX at the moment

Thanks for the clarification. I look forward to you posting the additional charts.

I found the rather long discussion on P&F charting which I will review on the weekend if I have the time: https://www.aussiestockforums.com/threads/point-figure-charting-secret-weapon.802/

 

[Logique]

A white knuckle ride for the All Ords, but now very oversold.

 

[Garpal Gumnut]

A white knuckle ride for the All Ords, but now very oversold.
View attachment 90006

Thanks Logique.

It's what I'm seeing.

I might take a hammer to the piggy bank next week.

gg

 

[$20shoes]

One more wave up to complete a generational Elliott structure?
It's difficult to label the higher degree count that this would create without more data, but the S&P also feels like it has one more substantial wave before a generational market top.
Youd think this Wave 4 down would find good support around 5600.

 

[$20shoes]