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XAO Technical Analysis

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I think think this rally is a bull trap and will probably end by Friday/Monday. This is not the big counter trend the bulls have been waiting for. Expecting market to continue bearishly until Feb/March timeframe before a multi month rally starts.
Explanations and charts in my next post to follow.
 
Following on from post #9761, I have updated my earlier EW annotations trying to fit the what I think is the most suitable wave count that gels with the cycle work I do.

9qf2q


Rest assured the market will do some fancy foot work in the months ahead to confuse all of us at this juncture and taking out all the stops before starting the next major leg down. So the chances of this working out this way are slim but what I am working with at the moment and will probably change as the waves unfold.
Fixed cycles suggest a low for this leg down in Feb/March point 18. Given that we have had a completed EW impulse down so far, the only wave count that supports this cycles analysis is a flat or expanded flat pattern. Originally I thought that an 1-2, 1-2,1-2 pattern was unfolding but the dynamic cycles analysis in the excel spreadsheet attached does not support this wavecount at this point in time. The Dynamic cycles analysis suggest at the least a re test of the lows at 5480 but more likely a false break new low in the coming weeks. Importantly fixed cycles chart below suggests the start of a multi month rally to cycle point 19 around mid year starting in Feb/March at cycle point green 18 which as can be seen has not been reached yet.


9qf7g


There are multiple time cycles coming together at 14th/15th January for a peak
9qfc7



Predictions and forecasting are one thing, but need to be patient and ready with the traders hat on for what actually does happen. But for now waiting patiently for a sell signal to generate in the next week))
 

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  • XAO cycles Analysis.xls
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I am popping up a couple of charts of the All Ords in order to link to them when I am discussing how I enter a trade. I use many indices and commodity charts to see how I feel the markets are travelling. If I don't like what I see or I get a gut reaction to wait a bit, I don't trade. I never feel the need to be in the makets all the time or from the lowest price point. I come to the markets with the attitude of a long term investor and any time I make an investment be it property, the markets or whatever I like to see good capital appreciation over time preferably with a dividend along the way.
I am not a gambler, that is why I am very thorough with any investments I make. Do I miss out on making money this way? Yes! Do I make money investing this way? Yes! Is it stressful? No! Is it time consuming? In the initial phase yes. Over time, no.

I am not keen on what I see in the charts at the moment. They may continue to rise and I may miss out on a trade, although I am not really finding much at the moment. If I was a short seller I would be setting up a heap of trades, it may be a short seller's dream come true anytime soon. However I may be wrong. :)

xao lowhighs 16.1.19.png

xao long term 16.1.19.png
 
Let the winners run I suppose.. XAO has retraced half of the fall since October. I think pattern theory says the breakout target is the mast height of the formation? Someone may be able to confirm..
XAO_21Jan2019_mark.png
 
This is the volume level for the All Ords from January 18 to part way through January 19. The red verticle line denotes the beginning of January.
I was struck by the very low level of volume so far this January as compared to the previous twelve months. It is noticeably different. I guess I am not the only one sitting on their hands.

Edit. The yellow line is drawn on the 700 level

xao 12 month vols jan 19.png
 
I did not anticipate a V-shaped recovery, as it has been so far. With volatility down, there may be more to come, although getting oversold now.
Why do I feel my chances slipping away in the XAO Yearly Prediction thread (5500). A little early yet to give up though..
XAO_7Feb2019_mark.PNG
 
alt count $xao
#ideas
xjo xao alt count 090219.png
interesting side notes:
in the SP200 ($xjo) cfd A circled has symmetry to C circled at 2.764%

$xjo is one of the few indexes i observe that adhere's well to typical extensions found in commods (esp 1.272, 1.414, .5236, 1.764,1.786 and .886 where that multiple is part of a structure (in other words it fits this orthodox method, fits the structure)

measures such as .618, 1.00 and 1.618 are far more common in $spx, yet even the $spx makes significant rotations on inverted 1.272's and the $dax too, whereas the $xjo tends to find extensions of 1.272, in the direction of the one-larger trend while in corrective mode...

also when a symmetric rotation occurs in the cash it also governs the cfd (front month contract) where the cfd does not exceed the same symmetry although rare, usually the other way around as the future leads the cash in most (price length and time) instances
 
I'm nervous. A big long V-shape run up, and it wouldn't surprise if the big houses weren't just itching to pull the trigger on a contrarian trade, notwithstanding the (nearly) Golden Cross
XAO_27Feb2019_mark.PNG
 
Please correct me if I am wrong, but as far as I can tell from looking back at a chart of the All Ordinaries Index, the All Ords is currently stuck in the second longest recovery in its entire history. The previous all time high for the All Ords was October 2007, over eleven years ago.

As far as I can tell, the longest ever recovery in the All Ordinaries (the period it took the market to exceed its previous all time high) was fifteen years between November 1888 and December 1903.

I remember learning in Economic History at uni (decades ago) that the 1890's depression in Australia was worst than what we refer to as the great depression of the 1930s (precipitated by the Wall Street crash of 1929).

The third longest recovery was between September 1987 and April 1996 (8.5 years) although the index came within two points of that high in January 1994).

The fourth longest was between January 1970 and September 1979.

Just some food for thought.
 
Starting to look interesting again, with a near term technical roll over looking likely, but how deep..
What about 1 year gold, firmly on track isn't it
Gold_Yr_25Mar2019.PNG
 
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