XAO Technical Analysis

[Garpal Gumnut]

Re: XAO Analysis

First close below the 200 day ema since the begining of this bull market. Signs are not looking to good technically. obviously the next critical level is around 5800 so will be keenly waiting to see what happens.

Sorry to be such a bear, but if it goes, the next support is 5500 and after that 5000 .

Garpal

 

[dhukka]

Re: XAO Analysis

It's interesting how every time a support line is broken technical analysts come up with a new one. So if it breaks through support does that mean it wasn't really support?

I guess if you keep drawing support lines lower and lower you'll eventually get to the 'real' support line. Then you'll be able to explain the stock market's movement as a bounce off the support line....after the fact of course.

Hey here's an idea, maybe there is no support, maybe support just exists as an imaginary line on a chart, that has no relevance to movements in stock prices?

Nah couldn't be.

 

[wavepicker]

Re: XAO Analysis

You said it Garpal,

this market has only moved down 50% of where it should eventually move for this first leg down. There is much more to come IMO, if not in the short term then in the medium term.

The market has a habbit of giving back gains very quickly especially when it comes to speculative miners. Easy come, easy go!! -

 

[eMark]

Re: XAO Analysis

Well here we are again, essentially at the bottom of the channel that's been in place since early 2003, and where each of the other main corrections has turned back into a new uptrend.

It's already broken the 200 day MA, so for me this level is now important. If it drops below the channel, my longs will be off and packed in moth balls for a while! :

Cheers,
GP

What would your typical scenario be? Would you sell up your stocks regardless of whether they are in a loss or profit scenario? Just curious as to what you would do? I guess I'm a long myself, as at the moment I have no choice with the "paper" losses I currently hold.

 

[waz]

Re: XAO Analysis

Im with you brittishcarfreak,
im at a loss as to why the XAO has fallen harder than the Dow Jones.
It would be good to compare it against the S&P500 aswell


Even though its the mortgage crisis which is getting all the media/forum attention. It would appear that the fall in commodity prices has been a bigger contributor to the fall. well in Australia.

Although, while losses in sub-prime will be gone for good, and will continue to occur for the next few months
At least commodity markets can pick up again. especially when you consider that inventories are falling for a number of metals. So while it may be hard to determine a price for a debt instrument (making it almost worthless) there will always be a price for a metal.

Something we can look further at, is what has happened with low-doc home loans in new Zealand. Over there int rates are for home loans are pushing 10% (and maybe more). But so far they havnt had many defaults.
Can the same be expected in Australia???

So my point is, the harder the fall, the bigger the bounce.

 

[wayneL]

Re: XAO Analysis

It's interesting how every time a support line is broken technical analysts come up with a new one. So if it breaks through support does that mean it wasn't really support?

I guess if you keep drawing support lines lower and lower you'll eventually get to the 'real' support line. Then you'll be able to explain the stock market's movement as a bounce off the support line....after the fact of course.

Hey here's an idea, maybe there is no support, maybe support just exists as an imaginary line on a chart, that has no relevance to movements in stock prices?

Nah couldn't be.

Yup.

Support is only support when there's support. I prefer the term "potential" support.

There may be fundamental/psychological reasons for support, and these can be charted, but not just because someone draws a line.

 

[theasxgorilla]

Re: XAO Analysis

im at a loss as to why the XAO has fallen harder than the Dow Jones.

One way to explain it might be the big fish, little pond analogy. The ASX is a little pond. When big fish from the ocean want to liquidate their positions the limitations of liquidity in our market are revealed more readily than what might happen if the same fish removed equivalent positions on a much larger market like the US. Or it might be the absense of an Aussie plunge protection team?

 

[spooly74]

Re: XAO Analysis

It's amazing how absurd our Aussie overreaction is to the US market. Look at this All Ordinaries vs the Dow Jones. Today is just ridiculous. 9.5 % down compared to 1 month ago vs 6.3% down for the Dow Jones.

OR are Aussies smarter and ahead of the US - and they're just lagging behind us.... I don't think so.

Could be due to the fact we have done so well, in US$ terms.
Offshore funds could grab some good profits.

Volatility is huge at the moment too.

 

[wavepicker]

Re: XAO Analysis

Yup.

Support is only support when there's support. I prefer the term "potential" support.

There may be fundamental/psychological reasons for support, and these can be charted, but not just because someone draws a line.

In an earlier post I mentioned that IMO this leg down in the indices is only 50% done at best over the medium term. Why would this be? Well I have looked at two of the "heavies" in the XAO, being BHP and RIO. Both have high probability patterns in place, and if these patterns play out as well as other similar patterns/setups that have traded in the past, these should be money for jam for those short in the coming weeks/months, if not already.

This should make quite dent in XAO in that time period. These are classic textbook EW patterns, they don't come much better. Just my 2c worth, not financial advice though.

Good Trading to all

 

[numbercruncher]

Re: XAO Analysis

NEW YORK (CNNMoney.com) -- U.S. investors will look to a rash of economic reports for direction Wednesday while taking in a global stock sell off prompted by fresh credit fears.

At 4:43 a.m. ET, Nasdaq and S&P futures were lower, with a comparison to fair value pointing to a flat open. U.S. stocks have finished lower the past four sessions.

http://money.cnn.com/2007/08/15/markets/stockswatch/


More pain on the way ? ....

 

[wayneL]

Re: XAO Analysis

At 4:43 a.m. ET, Nasdaq and S&P futures were lower, with a comparison to fair value pointing to a flat open. U.S. stocks have finished lower the past four sessions.

These journos really are muppets! Comparison to fair value at 4:43 AM is total BS and points to SFA.

 

[ozambersand]

Re: XAO Analysis

Where can I find figures for market turnover and volumes of trades for the XAO over a period of time?

For example, today's market turnover was $A 8,481,442,489.00 but I would like to get a feel of the figures over a period of time and the accompanying volume of trades and I can't find it listed anywhere.

(Sorry I suppose this should be in the Beginner's forum but it does relate to the XAO! I did do a search of the forum but didn't come up with any site that stores that info)

 

[nomore4s]

Re: XAO Analysis

Here's a logarithmic 5 year daily chart of the XAO. Prices now at the bottom trend line. Pretty strong tend line about to be broken.

 

[brettc4]

Re: XAO Analysis

I think we have a problem listening to financial journalists. Most of them would have never seen a market like this, and even if they had, the market dynamics are completely different, the local and global economies are different. TO me they are just putting a finger in the air and hedging their bets either way and hoping the mass of the population cannot tell they have no idea about what's going on.

The bad thing, the mass of people do not know what is going on so they hear these reports and think, well they are in the media, CNBC, Wall Street journal whatever, they must knoww hat is going on. Lets get out before it gets any worse.

I would like to see this exact situation played out with no media commentary, it would be so much different.
A couple of companies would come out down the track and say;
"Huh, we have a credit issue, wrote off some bad loans, raised some additional capital, the numbers will be down a little next year, but on the whole things are still alright".

And people would sell off that company but it wouldn't be this widespread.

Basically I think we let the media get away with too much, and one the whole we let them.

Fox News, we report you decide.
Sounds like; McDonalds, Worlds favourite fries.
Who do you believe?
The Truth is out there.

 

[ozambersand]

Re: XAO Analysis

Wow, if that upturn that happened after the bottom in Feb 2003 is repeated tomorrow, I'd be kicking myself that I didn't buy some call warrants today.

I couldn't wait for an answer to my question re historical data so checked out a few sites and found some data on the Sydney Morning Herald site.

Some of the posters here said they wouldn't look at starting to get back into the market until the volumes picked up. (At least that's what I think they said! )

So, I graphed the volume (/000), the value (/0,000) and the XAO index in Excel to try and see what sort of pattern results with upturns.

This is what the figures gave. Now I am NOT a chartist, so can anyone interpret these and see if there is a pattern here? You can see the end of the financial year spikes, but I would be interested in anyone else's theories as to why other ones occurred and what to look for.

(Also, am curious why if volumes and value of trades is still high, why the ASX share price is down so much? Is it tied to the XAO?)

 

[insider]

Re: XAO Analysis

The Ftse is doing crap and so is every other European Market so maybe the US dips again tonight...

The US opens in 41 minutes people... How will it go?

 

[GreatPig]

Re: XAO Analysis

What would your typical scenario be? Would you sell up your stocks regardless of whether they are in a loss or profit scenario?

The few positions I have left have mostly all just poked their noses down below their trend lines today, so any more movement down would see them gone irrespective of the index.

I guess if the market was still in a strong uptrend I might wait a bit longer on the likely probability that they'd recover, but not at the moment.

GP

 

[>Apocalypto<]

Re: XAO Analysis

Is this a bull market still, or is this a birth of a bear?

I can not say, it's to early to tell for me.

What I do know:

We are in a strong short term down trend, which we needed to have! its a 10% correction now normal. From the may sell off low point to the highs I have a fibb measurement.

We are now at 38%, I personally dont think its over and i see 50% hit that lines up with a trend line. As wavepicker has noted, the next real rally from the low point which I think will be around the 50% point will sell this to me. A fast sharp push that fails and falls back to or under the rally point will send a word of warning to me. If we rally fall rally, strat to show a range of support, that is a posible sign of accumulation a positive sign as long as a good support base is found.

Until that is shown this is a very tricky situation and I am not confident to be bargain hunting so to speak.

Time will tell members, right now the current driving trend is down!

Good trading.

see chart...

 

[Magdoran]

Re: XAO Analysis

It's interesting how every time a support line is broken technical analysts come up with a new one. So if it breaks through support does that mean it wasn't really support?

I guess if you keep drawing support lines lower and lower you'll eventually get to the 'real' support line. Then you'll be able to explain the stock market's movement as a bounce off the support line....after the fact of course.

Hey here's an idea, maybe there is no support, maybe support just exists as an imaginary line on a chart, that has no relevance to movements in stock prices?

Nah couldn't be.

Dhukka,


It really depends on which technique you are using.

The system I use works very effectively. In fact sometimes it is freaky when you see support and resistance come in to the cent.

The problem with this era’s “orthodox” approaches is that they only work in specific conditions if they work at all.

Remember, “Support” and “resistance” involves the dimension of time too, and used in concert with price can be very effective.

The lines being drawn on the amateur charts are hardly a measure of effective technical analysis.

If you are in doubt, look at my XAO call for 23 Feb, and the comment I made about a week out from the high which quoted the most likely level of resistance to within one index point.

That is the kind of resistance call you should be paying attention too, not the hopeful lines drawn on amateur bull's charts.

If you take the time to understand how to locate price harmonics and McLaren’s concept of the “division of the range”, and road tested it heavily trying to make or break it, then maybe you’d have a different perspective.

But to make a sweeping claim like you have indicates to me that you haven’t really examined this quadrant of thinking, hence my challenge.

Completely up to you of course if you want to find out more, and put the necessary time and effort in.


Kind Regards


Magdoran

 

[GreatPig]

Re: XAO Analysis

If you take Fib levels over the whole bull run from early 2003, the 38.2% level is around 5000, the 50% level around 4560, and the 61.8% level around 4110.

If the market fell back to that 50% level over quite a few months, it would meet up with my longer-term trend line from post-'87, which is currently around 4230 and rising at 6.8% a year.

GP