XAO Technical Analysis

[eskys]

Premarket slowly turning green, gold up a tad now

 

[Sean K]

This support might be tested again here. If that was a triple top I guess the downward target on a break down of support here would be the length of the break up. There's so much liquidity in the system though, I have a feeling any decent fall will be bought up and the Feds will kick the can down the road a bit longer.

 

[Sean K]

Not much of a change since the last review. The 7200 ish level and the mid-line of the 10 year chanel remains support. Well under the moving averages, so bias down for me. Looks like a down FY performance coming, well done to anyone who made a buck this FY.

We have tax-loss selling to come in the next 3 weeks, so could be a pretty ordinary year all up. Breaking down through that general 7200 level could be untidy.

 

[greggles]

I think we will hit bottom by the end of June, or rather I hope that we will. I think that most of the bad economic and geopolitical news is already factored in, the only thing that could see us go further south from July onwards is more bad news, such as widespread recessions in western economies.

 

[Sean K]

I think we will hit bottom by the end of June, or rather I hope that we will. I think that most of the bad economic and geopolitical news is already factored in, the only thing that could see us go further south from July onwards is more bad news, such as widespread recessions in western economies.

Agree, I think a lot of pessimism is factored in. Higher interest rates and recession are already baked in I think. Any sign that inflation is being tamed in the next 6 months might be a surprise to the upside. How Ukraine unfolds is the big mystery. My bet is on Russia stopping at the Dnipro River and Ukraine ceding the east part of the country. But, if they refuse to give any land and continue to fight with Western backing, anything could still happen. Lots of stuff going on and uncertainty. Next thing you know, China owns Myanmar.

 

[Greynomad99]

I've mothballed my trading for now as the market is totally unpredictable with fear of inflation, China, Russia, recession and even (God help us) - monkeypox!! Looking at the XAO chart I'm expecting it to rise back to 7500 and then maybe fall away again or maybe break higher - I can't see anything in the chart that tells me where we go from here that would be more reliable than the toss of a coin. However, (as always) the tide will turn eventually.

 

[MovingAverage]

Higher interest rates and recession are already baked in I think.

I was thinking that too at the start of the week...everyone expecting a rate rise so no surprises there. Then Tuesday rolls around and RBA announces rate rise then a big sell off of the banks. To me that suggested this wasn't already baked in. Granted the rate increase was higher than anticipated but to me it wasn't a massive surprise given a lot of experts are expecting further inflationary increases. Still think a lot of what is to come with the economic headwinds isn't baked into the market yet. Just my 2cents

 

[Greynomad99]

US down another 2%+ overnight - so another day of pain and suffering here today. Hopefully just a lower opening followed by a recovery - but it is Friday which often turns to custard without much effort. Very little out there I would buy before having knocked off several large Scotches.

 

[eskys]

One positive; at least the banks have turned around this morning, hope they keep it up

 

[eskys]

A traders' market nowadays...looking at the top and bottoms for the four majors, and where they're at now

 

[Greynomad99]

Looking at last night's US trading and that last week's XAO candle closed on its lows and made a lower low since the last trough I'd say it is time to circle the wagons and prepare for the worst next week. A fall (close) below 7030 would be very bad news. I've been holding onto a few MQG thinking they might buck the trend but alas - time to sell with them given they have also made a significant lower low.
Looks like it will get worse before it gets better.

 

[eskys]

Hmm, was thinking....maybe a good thing we have a day off on Monday..........

 

[KevinBB]

A fall (close) below 7030 would be very bad news.

If this happens and we get a drop on XJO down to 6500 or so, then you won't be able to see the sun because of moths flying out of my wallet.

KH

 

[MovingAverage]

Sure looks to be getting ugly. XAO closed the week at a new low and last time we were here was Feb/March 2021. CPI figures out of the US overnight have reached a new high of 8.6% with experts now suggesting the Fed could raise interest rates next week by 0.75%. Overnight the Dow dropped 880 points!! Hold on to your hats boys and girls...XAO in for a wild ride next week.

 

[Gunnerguy]

If this happens and we get a drop on XJO down to 6500 or so, then you won't be able to see the sun because of moths flying out of my wallet.

KH

I was thinking about placing a Bull Put Credit spread at 6,400/6,000 yesterday but held back.
It might be better to place one at 6,000/5,800 next week expiring in July.
I read somewhere that due to EOFY there’ll be a lot of volatility in June to close out positions and ‘manage’ CGT gains/ losses for the year.
Triple witching in the US next Thursday.
A bumpy week ahead.
Gunnerguy

 

[Greynomad99]

If this happens and we get a drop on XJO down to 6500 or so, then you won't be able to see the sun because of moths flying out of my wallet.

KH

I hope they are not like Icarus!

 

[Sean K]

Haven't seen a start like this in a while. Next stop might be the bottom of the chanel.

 

[Gunnerguy]

I was thinking about placing a Bull Put Credit spread at 6,400/6,000 yesterday but held back.
It might be better to place one at 6,000/5,800 next week expiring in July.
I read somewhere that due to EOFY there’ll be a lot of volatility in June to close out positions and ‘manage’ CGT gains/ losses for the year.
Triple witching in the US next Thursday.
A bumpy week ahead.
Gunnerguy

After today I am thinking if there is a further ‘capitulation’ drop it would be 15% and thus maybe selling a spread at 5,700, or maybe 5,300 for a real ‘the World is burning’ drop. But with inflation and ASX being heavily commodities and the suggestion that these suffer less in this inflation environment, who knows but a retracement all the way to 5,300 would have me surprised.
I really really don’t think it will go the Covid low of below 5,000.
A spread at 5,300/5,000 for August maybe ?
Lots of sellers for EOFY CGT management in June, then they’re all buy ins to boost the index in July/ August.
.... so selling a 5,300/5,000 for August for me I think. If it breaks 5,000, I’m pretty fu$ked anyway. Thank God I’ve got 1 years living expenses in ‘cash’.
Gunnerguy

 

[Garpal Gumnut]

Haven't seen a start like this in a while. Next stop might be the bottom of the chanel.

After today I am thinking if there is a further ‘capitulation’ drop it would be 15% and thus maybe selling a spread at 5,700, or maybe 5,300 for a real ‘the World is burning’ drop. But with inflation and ASX being heavily commodities and the suggestion that these suffer less in this inflation environment, who knows but a retracement all the way to 5,300 would have me surprised.
I really really don’t think it will go the Covid low of below 5,000.
A spread at 5,300/5,000 for August maybe ?
Lots of sellers for EOFY CGT management in June, then they’re all buy ins to boost the index in July/ August.
.... so selling a 5,300/5,000 for August for me I think. If it breaks 5,000, I’m pretty fu$ked anyway. Thank God I’ve got 1 years living expenses in ‘cash’.
Gunnerguy

Thanks for those charts.

I've done a few support resistance lines on the XAO and right where we are at 6700 seems good for a sideways movement and consolidation. Given all the fear who knows. Covid caused a bigger whack in 2020 with larger volumes because of the unknown. In fact most people were anticipating inflation, rate rises and a market fall, so it isn't that threatening as the Covid drop. Though it may be as grinding as the 2008 fall.

The question is where does it stop falling. Here at 6000, the best case or the worst being the lows of 2008 close to 3000. The latter given our commodities and energy seems unlikely, who knows.

Somewhere in between may be more reasonable. The Fibonnaci retracement to 20 years ago in 2002 shows 4720 and 6000 as likely support.

Just some thoughts.




gg

 

[qldfrog]

After today I am thinking if there is a further ‘capitulation’ drop it would be 15% and thus maybe selling a spread at 5,700, or maybe 5,300 for a real ‘the World is burning’ drop. But with inflation and ASX being heavily commodities and the suggestion that these suffer less in this inflation environment, who knows but a retracement all the way to 5,300 would have me surprised.
I really really don’t think it will go the Covid low of below 5,000.
A spread at 5,300/5,000 for August maybe ?
Lots of sellers for EOFY CGT management in June, then they’re all buy ins to boost the index in July/ August.
.... so selling a 5,300/5,000 for August for me I think. If it breaks 5,000, I’m pretty fu$ked anyway. Thank God I’ve got 1 years living expenses in ‘cash’.
Gunnerguy

Gunner,
Why would you be pretty fuxxked if market falls down to 5k or even less.
We are still in the high 6k.
My own 20c is that you should not put yourself in that position..so cash ,options, reverse indexes..you have the choice even now to make the "can not happen" liveable.
Do it for your own good.