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XAO Technical Analysis

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Re: XAO Analysis

I’m going to be a gutsy here and say there should be temporary support tomorrow for the XAO, since it’s hit some key time angles – not strong support, but enough with such exhaustive moves that some key stocks look like they have exhaustion bars down.

I’m not saying the bear drive is over (although it may be for a while), but I wouldn’t be surprised to see some reversals and minor moves for some stocks for a couple of days.

If we do get a rally, there is the danger of a major lower high coming in signalling another leg down, but I have to say that I see conflicting patterns at this juncture.

In the weekly it just looks like it needs another leg up to complete… but this does not preclude a very strong bearish drive in the interim.

I suspect we’ll get a counter trend between tomorrow and early next week. How strong this is and if it can make a higher low will say a lot about this bear drive.

Regards


Magdoran
 
Re: XAO Analysis

Magdoran said:
I’m going to be a gutsy here and say there should be temporary support tomorrow for the XAO, since it’s hit some key time angles – not strong support, but enough with such exhaustive moves that some key stocks look like they have exhaustion bars down.

I’m not saying the bear drive is over (although it may be for a while), but I wouldn’t be surprised to see some reversals and minor moves for some stocks for a couple of days.

If we do get a rally, there is the danger of a major lower high coming in signalling another leg down, but I have to say that I see conflicting patterns at this juncture.

In the weekly it just looks like it needs another leg up to complete… but this does not preclude a very strong bearish drive in the interim.

I suspect we’ll get a counter trend between tomorrow and early next week. How strong this is and if it can make a higher low will say a lot about this bear drive.

Regards


Magdoran
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Fully support your view Mag,

The last time for support which was accompanied by a 5 wave structure only led to a very small day rally. It was either going to be that or something slightly higher which didn't materialize. It seems that using a variety of methods ranging from your Gann Analysis to Fib Time Analysis, that the dates you have quoted 20-22nd August might be significant. I could envisage that a nice zigzag(abc move down) could be in place by that time. Thereafter I don't have any further significant dates till mid to late September, so the rotation in terms of price is upward/sideways in that timeframe. Having said that I am under the assumption that this will be a countertrend and later lead to a capitulation type fall(as wave C's can be a lot like wave 3's) to end this leg down. I am bearish this market till November, for this leg down.

Cheers
 
Re: XAO Analysis

It looks quite messy in the short term at least. I have a minimum downside target of 5657 for the not too distant future based on a downside projection of the range as posted. Notice the rallies last week, were only able to cover 50% of the highs in July. Hmmm, says to me this market has still quite a bit of falling to do before we accumulate for a while and then decide what to do next.
 

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Re: XAO Analysis

wavepicker said:
Fully support your view Mag,

The last time for support which was accompanied by a 5 wave structure only led to a very small day rally. It was either going to be that or something slightly higher which didn't materialize. It seems that using a variety of methods ranging from your Gann Analysis to Fib Time Analysis, that the dates you have quoted 20-22nd August might be significant. I could envisage that a nice zigzag(abc move down) could be in place by that time. Thereafter I don't have any further significant dates till mid to late September, so the rotation in terms of price is upward/sideways in that timeframe. Having said that I am under the assumption that this will be a countertrend and later lead to a capitulation type fall(as wave C's can be a lot like wave 3's) to end this leg down. I am bearish this market till November, for this leg down.

Cheers
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Hello wavepicker,


Certainly a plausible scenario. Privately the ABC was my favoured pattern, but I’m wary that the XAO has moved further than other indexes (especially the US, where the sub prime meltdown ironically is located).

It's funny, but when on the short side, one must not get too cocky; these markets can rally up on you very sharply with this kind of volatility...

The problem with the time cycles at this point is that pitch can overcome support and resistance in time, hence I'm cautious.

The 3% move in the XAO yesterday makes me think that a counter trend must emerge soon and arrest the move down since markets seldom move in straight lines, and even though the bears are in command right now, this kind of volatile market can chop sharply and very quickly, so if short it's important to take that partial profit when you see exhaustive bars...

The big question is whether this is a correction nearing its end and a bull market will resume (albeit in a choppy consolidation), or if there is a counter trend up to make a significant lower high, and further downside?

The counter trend that comes out of this will say a lot. Having studied various tops the pattern that emerges will give clues as to which way this market may play out.



Regards


Magdoran
 
Re: XAO Analysis

Would be most unusual for our market to rise over a federal election period, with the likely outcome that the polls are forecasting. A change to right wing Labor, ie Hawke/Keating was just tolerated, anything else no chance.
 
Re: XAO Analysis

Hello Mag, hope you are well and brilliant!!

Magdoran said:
It's funny, but when on the short side, one must not get too cocky; these markets can rally up on you very sharply with this kind of volatility...
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So very true, that is why when trading this sort of volatility timing is of the essence


Magdoran said:
The counter trend that comes out of this will say a lot. Having studied various tops the pattern that emerges will give clues as to which way this market may play out.
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Well as Maclaren says, if one is going to succeed in this business, then 90% of ones positioning must come from countertrends. Understanding the pattern of trend and types of countertrends together with timing is paramount, especially with regard to derivatives.

So it will be interesting to see the move that comes from this. From my perspective the patterns in the market are quite clear at present, these views are based from the long terms patterns/wave structures that are in place together with Cyclical Statistical studies. Offcourse anyhting is possible in the market and sometimes things don’t go as planned or expected. There are no certainties and one has to be cognizant of this and have contingency plans in place.

Let’s see what happens early into next week then
 
Re: XAO Analysis

Magdoran said:
The 3% move in the XAO yesterday makes me think that a counter trend must emerge soon and arrest the move down since markets seldom move in straight lines, and even though the bears are in command right now, this kind of volatile market can chop sharply and very quickly, so if short it's important to take that partial profit when you see exhaustive bars..
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Hi Magdoran i have no idea what an exhaustive bar is, or looks like, for those of us less experienced and informed could u provide an example and explanation please?
 
Re: XAO Analysis

springhill said:
Hi Magdoran i have no idea what an exhaustive bar is, or looks like, for those of us less experienced and informed could u provide an example and explanation please?
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I'll put up a couple of examples - looking for bearish ones, but have a few things on, so will fire them through hopefully for the XAO when I can...

Mag
 

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Re: XAO Analysis

ok guys this is really getting messy now.
touching 5660.
another 60 we will break and goes to 5000.
this is mad.
we are reseting back to december year 2007.
all booming for the past 7 months are gone in 4 weeks.
what will happen?
what will drive ppl back to market?
interest rate cut?
any idea anyone?:confused:
 
Re: XAO Analysis

springhill said:
Hi Magdoran i have no idea what an exhaustive bar is, or looks like, for those of us less experienced and informed could u provide an example and explanation please?
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Had this one in my stable of top studies...
 

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Re: XAO Analysis

springhill said:
Hi Magdoran i have no idea what an exhaustive bar is, or looks like, for those of us less experienced and informed could u provide an example and explanation please?
Click to expand...
And another...
 

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  • 2007-08-16 XAO 1989 Top example.jpg
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Re: XAO Analysis

Panic has definitely taken over now. This is the maddest rush to the exits I've ever seen in my 6 years of trading. All bets are off as far as I'm concerned ...
 
Re: XAO Analysis

Looks like the age of easy $$ for bulls just got a fraction harder.....

Navigating the markets from now on might require doing some work
 
Re: XAO Analysis

springhill said:
Hi Magdoran i have no idea what an exhaustive bar is, or looks like, for those of us less experienced and informed could u provide an example and explanation please?
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Just revised the 1993-94 top example, with all the exhaustive bars marked. This is an excellent example of how bearish moves can play out, and what to look for to either exit shorts or take profits along the way down.

(McLaren suggests exiting half at projected points of support – you can take 1/3rd off if confident, or 2/3rds off if nervous for example so at least a portion of the position allows the winner to run, but prevents a winner from turning into a loser if the market reverses strongly on you – reduces the chances of overstaying a position.)
 

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