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XAO Technical Analysis

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The old Chinese curse about 'living in interesting times' certainly applies to the sharemarket at the moment. The US market was well down overnight along with out futures, so despite our market showing strong moves up yesterday, it looks as if today (I hate Fridays!!) is going to be another rout. I suspect it will take us back to that previous level of support around 7,480 that I commented on in a previous post and which did hold. Many of my trades are sitting close to or on support trendlines so I'm hoping today is not as bad as it seems to be looking. Good luck to all but probably not a day to check the market until 4.10pm!
 
Yeah U.S futures were deep into the green and the markets opened strong before melting all session last night.

Reality is nobody has the slightest clue what's going to happen next and that uncertainty is probably what's driven things into the red.

It was also the end of the quarter which usually means selloff too.
 

Due for a proper correction. I wouldn't mind your 12% possibility on the previous page. 6900 ish might encourage me to deploy $$. A couple of significant bumps on the way back down. Could we go lower than the high before Covid though?

 
Looks like we could be running into the 4th October in line with the Forecast . Initially I was looking for Low either today or Monday the 4th October which could be the case . It is interesting to note the the recent price steps down which measure 206 315 with the recent swing measuring around 279 so we are still below the previous step of 315 points down which is a handy marker. 7393 could be a significant level if we get support coming in around this point culminating on the Cycle date could point towards trend up till around the 13th October where first Top is indicated . In the letter issued on the 20th September a decline of approx 6 1/2% was indicated from the 13th August 7902 Top which is in line with the projected price target at around 7393 which is a natural point of support .
 

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U.S futures are deep into the red just to rub the salt in.
 
kennas said:
Due for a proper correction. I wouldn't mind your 12% possibility on the previous page. 6900 ish might encourage me to deploy $$. A couple of significant bumps on the way back down. Could we go lower than the high before Covid though?
Click to expand...
Yes we can break the pre-Covid high. The chart below suggests the XAO is currently testing 7470 and with another down overnight in the US, our market will probably retest that level again today - although my optimistic outlook says we will open lower today but close higher and then perhaps have a couple of green days to lift us towards the XAO's recent highs. My pessimistic outlook says that 7470 will break and we'll head for 6830 and turn our current 4% - 5% wobble into a 13% correction. Coming out of Covid and facing less concern about Evergrand than perhaps the US, I'm favouring our market not going into a tailspin - but as I've said before, when a retracement develops a life of its own and becomes delf-fulfillling, big falls are the result.
Not panicking at this time, just watching stop losses.
 
The XAO: technically, it's had a long period in the sun. On TA analysis, iis at max trendline.
On P/E ratios, historically high.
Buy Puts
 
Logique2 said:
The XAO: technically, it's had a long period in the sun. On TA analysis, iis at max trendline.
On P/E ratios, historically high.
Buy Puts
Click to expand...

Just coming off max trend line, yes.

Overall, still in a trend line dating back 10 years. There's some minor support on a correction between 7150-7300 so hopefully we see something orderly down to those levels at some stage and some consolidation.

Some peeps seem to be expecting something like a 08 or 20 crash through all support lines. Not sure what's going to trigger that other than a shooting match in Taiwan. Perhaps we'll see something like 2015 instead.

 
Three weeks later and not much has changed on the long term chart. Still skirting the top level of the channel with plenty of room downwards for a healthy correction. Still looking at the mid line of that to be a potential target for a smallish correction coinciding with the Feb 20 highs and around the 7200 mark.

 
This upper diagonal support line moving towards the top of the channel has got to give at some stage.

 
Sean K said:
This upper diagonal support line moving towards the top of the channel has got to give at some stage.
Click to expand...
Unless you are working with EOD then it looks way more optimistic.

It had a quick dip toward the 200dsma and then popped over the long term diagonal resistance. I reckon it is on the upper but I may be very wrong Sean, time will tell!

 
Sean K said:
This upper diagonal support line moving towards the top of the channel has got to give at some stage.
Click to expand...

If I had even bothered to switch on my Prat Meter (PVI) I would never have doubted your call. Note to self, check the bloody prat meter before you put your incompetence on display! I see the Smart Money (NVI, not shown) is still well and truly above the line. So I wonder if the 200dsma will hold? Pandemic news ain't awesome but!

Edit: This is a daily chart this time.

 
Sean K said:
I must add the Prat Meter to my signals.
Click to expand...

I am guessing I have already sold you on my Prat Meter Sean but here are a couple of charts, the first one was an old one back in 2013 when I was in my yellow period! I seem to remember I was suggesting it was time to head back into the markets and using the Prat Meter as substantiation.

If you look at the PVI, it seems as though it can offer a good indication as to when to hop back into the markets using a simple trend line to indicate.



The second chart I did today to take a close up of what the Prat Meter did back in the '07/'08 crash. I have a feeling there is a bit of a lag between the time the prats leave before the main crash comes.

Shortly I am going over to BHP to put up a chart that shows a very rare chart pattern called a 'three peaks domed house'. I saw this shape back in 2006, sadly I lost all my early charts to a computer crash, so I can't date it precisely but it was around then. Recently I saw it again at the end of December 2018 on the DAX and another chart. At the time I didn't mention I felt it was a warning of a major crash as I had no proof but now I am reasonably satisfied it is an advance warning sign.

 
If the line on the first chart was extrapolated out to today, what would the point of intersection be on the XAO? Just a thought.
 
sptrawler said:
If the line on the first chart was extrapolated out to today, what would the point of intersection be on the XAO? Just a thought.
Click to expand...

As you can see SP, I am still using that same red rising support on my chart as a potential target. If we have a crash it may want to test that long term support. Quite a journey down!

 
Ann said:
As you can see SP, I am still using that same red rising support on my chart as a potential target. If we have a crash it may want to test that long term support. Quite a journey down!

View attachment 133502
Click to expand...

Ann, can you do that on a logarithmic scale? Probably has the same support line but will flatten.

Ideal case for me, where I'll feel more confident in deploying cash, is if we hit the green circle.

 
Last edited:
Sean K said:
Ann, can you do that on a logarithmic scale? Probably has the same support line but will flatten.

Ideal case for me, where I'll feel more confident in deploying cash, is if we hit the green circle.
Click to expand...

Log Scale, I hope this doesn't make you feel too uncomfortable Sean!



and I have added the same thing zoomed between the top of the 2007 crash and now.

 
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