XAO Technical Analysis

[chris1983]

Re: XAO Analysis

Well we can only tell tonight. A lot of investors who sold out will be hoping its a larger correction. If it starts pulling back up tomorrow after they got out today they will be quite sorry. It allready recovered quite a bit from the morning. Atleast the Shanghai index showed recovery today. Its still going very strong considering its recent rises.

 

[Sean K]

Re: XAO Analysis

Well we can only tell tonight. A lot of investors who sold out will be hoping its a larger correction. If it starts pulling back up tomorrow after they got out today they will be quite sorry. It allready recovered quite a bit from the morning..so keep an eye out for people hammering the forums saying its not over. Atleast the Shanghai index showed recovery today. Its still going very strong considering its recent rises.

The chart isn't going to go directly up, or down. The second chart is 3 year weekly so all the bumps are taken out. There might be some consolidation sideways movement before a definate trend reappears. Might take a week or 4...

 

[GreatPig]

Re: XAO Analysis

If it starts pulling back up tomorrow after they got out today they will be quite sorry

The way I look at it, selling today and missing out on gains tomorrow is an annoyance, but the funds are safe and more opportunities will arise. Not selling today and losing another packet tomorrow could prevent those future opportunities from being taken at all.

GP

 

[Garpal Gumnut]

Re: XAO Analysis

Interesting, as in nice colours? Nice eh? I just love drawing these things. I should have done art at uni.

Yeah, I understand wave 3 supposed to be the longest, but I'm not sure about the never part. I've come to accept that T/A of any sort is all probabilities and never certainties. There's always exceptions to every rule. In fact, I couldn't say T/A is a rule anyway, it's just a guide. There's a whole bunch of charts out there that don't conform to support and resistance lines, fib, or EW in the slightest. But they would be the exceptions.

This longer term chart also shows a wave 5, with a couple of anomolies in it. The wave 3 is the longest here. Whatever the case, I think we're in for at least a 3 wave downward move in all probabilities. On this long term chart the A B C could take it down to 4800 ish, but I'm not that bearish. Yet.

Very nice chart and interpretation Kennas

However as I've recently posted in the PANIC!! thread I believe the wave 5 was longer than the wave 3 and the reasonable ABC retracement will be to 50%, i.e. 5500, as there is support at that level and that is where a cautious accumulation should begin.

Garpal

 

[chris1983]

Re: XAO Analysis

The way I look at it, selling today and missing out on gains tomorrow is an annoyance, but the funds are safe and more opportunities will arise. Not selling today and losing another packet tomorrow could prevent those future opportunities from being taken at all.

GP

I agree with what you have said Gpig..but I really didnt think this would last which is why I didnt sell off anything. I guess thats a risk I'm taking by not selling out..but to me I only believe this correction would be short lived. I reckon it will be a 100+ point rise today on the DOW. Too many bargains..they wanted any reason for a sell off and the chinese market gave it to them. I learnt from the last correction not to sell. Do you guys really see the economies weakening atm? They are going so strong..China/India/USA. Just have to watch inflation figured in the US.. Ive never been in a crash..so I have no idea how to pick one..but from the looks of things it was a bit of a sell off for nothing?(Panic panic panic). The movement on the DOW should let us know which direction its heading..so now we wait

 

[GreatPig]

Re: XAO Analysis

Seems like the XAO is moving up a well defined channel now, since the bull run started in early '03.

That puts the bottom at just under 5400 right now.

Cheers,
GP

 

[Sean K]

Re: XAO Analysis

Seems like the XAO is moving up a well defined channel now, since the bull run started in early '03.

That puts the bottom at just under 5400 right now.

Cheers,
GP

It should come back to the mean at least in the next few months. It had moved about 15% away from the 200d ma as well, and each time it has moved away like this the past 3 years there has been a correction of about 8ish %. It's been due, and we've been saying that in this thread since early Jan. It's still got some way to go to be a healthy chart IMO, and that level is closer to 5400 than 6000. It's also bounced well off the 200d ma, so if it approacheds that again, I'd get set for some long positions if the economy is still sound.

 

[GreatPig]

Re: XAO Analysis

Actually that blue line on my chart down below 4200 is closer to a long-term mean.

Nice short if you can get it

GP

 

[theasxgorilla]

Re: XAO Analysis

A bit of fun analysis on the XAO...

Currently falling down an 8x1 (very fast), but historically more likely to fall down a 4x1 or a 2x1 when correcting. So unless the uber bears are actually right and we are in the early stages of some meltdown scenario, the velocity of the current fall should slow.

 

[wavepicker]

Re: XAO Analysis

It should come back to the mean at least in the next few months. It had moved about 15% away from the 200d ma as well, and each time it has moved away like this the past 3 years there has been a correction of about 8ish %. It's been due, and we've been saying that in this thread since early Jan. It's still got some way to go to be a healthy chart IMO, and that level is closer to 5400 than 6000. It's also bounced well off the 200d ma, so if it approacheds that again, I'd get set for some long positions if the economy is still sound.

Only trouble kennas is that "the mean" as you call it is not really a good representation of the actual mean. The current data point on your 200 MA is reflective of the 200 MA at 101 periods ago. So your current 200MA level should actually be aligned with price point of 101 periods back.

Only then you can really establish an accurate deviation away from a nominal level and as to whether the market is at high probability for a reversal or whether it will keep trending

Cheers

 

[CanOz]

Re: XAO Analysis

Is it relevant to use the channel trend lines on a 5 minute chart like this?

 

[Sean K]

Re: XAO Analysis

Only trouble kennas is that "the mean" as you call it is not really a good representation of the actual mean. The current data point on your 200 MA is reflective of the 200 MA at 101 periods ago. So your current 200MA level should actually be aligned with price point of 101 periods back.

Only then you can really establish an accurate deviation away from a nominal level and as to whether the market is at high probability for a reversal or whether it will keep trending

Cheers

Have you got software, or a program, that does this? I'll put it on the Christmas list.

 

[theasxgorilla]

Re: XAO Analysis

Only trouble kennas is that "the mean" as you call it is not really a good representation of the actual mean. The current data point on your 200 MA is reflective of the 200 MA at 101 periods ago. So your current 200MA level should actually be aligned with price point of 101 periods back.

I don't get this. Can you elaborate, please.

 

[CanOz]

Re: XAO Analysis

Is it relevant to use the channel trend lines on a 5 minute chart like this?

Can someone shed some light on my query please?

 

[Edwood]

Re: XAO Analysis

Can someone shed some light on my query please?

Hi CanAU - you prob need a trend line along support, which would give a descending triangle - bearish continuation pattern. fwiw out of hours we're down to low 5,700's so appears to have played out as a bearish triangle anyway (with the benefit of hidsight mind! )

hope this helps!

Ed

http://stockcharts.com/school/doku....t_analysis:chart_patterns:descending_triangle

 

[wavepicker]

Re: XAO Analysis

Have you got software, or a program, that does this? I'll put it on the Christmas list.

kennas,
most softwares will handle displacing of MA's either forward or back. Any softwares that enable you to write code and set up custom indicators are best ie :-

-Wealthlab
-MS
-Amibroker
-Excel

There are more as well but you gotta look for them

ASXGorilla

What I am saying is that the lag in the MA must be taken into consideration.
By allowing for the lag and moving the MA back in time (by how much depends on the type of MA you are using and it's span) we are then aligning the MA with price, MA's as used conventionally are out of phase with price due to the lag component.
From here you will see that when price crosses the MA it will move an equal distance in the opposite direction (from the MA) compared to the distance to the MA previously made before crossing the MA. This is especially the case in a sharp move. In many cases price is merely acting like a pedulum. By doing this we are calibrating the equilibrium of that pendulum.

Cheers

 

[professor_frink]

Re: XAO Analysis

kennas,
most softwares will handle displacing of MA's either forward or back. Any softwares that enable you to write code and set up custom indicators are best ie :-

-Wealthlab
-MS
-Amibroker
-Excel

There are more as well but you gotta look for them

ASXGorilla

What I am saying is that the lag in the MA must be taken into consideration.
By allowing for the lag and moving the MA back in time (by how much depends on the type of MA you are using and it's span) we are then aligning the MA with price, MA's as used conventionally are out of phase with price due to the lag component.
From here you will see that when price crosses the MA it will move an equal distance in the opposite direction (from the MA) compared to the distance to the MA previously made before crossing the MA. This is especially the case in a sharp move. In many cases price is merely acting like a pedulum. By doing this we are calibrating the equilibrium of that pendulum.

Cheers

morning wavepicker,
interesting thoughts
I've done a little bit of experimenting with displacing ma's(obviously nothing as indepth as what you're describing!), but I'm still not quite sure what you're talking about here. When looking at a chart like the one you posted, it looks easy to spot where the trend got ahead of itself, but how do you know in realtime?
By that I mean, the MA won't arrive at the current price action until 'x' periods(whatever the displacement is) after the current bar.

Do just estimate where it wil be when it catches up? Or have I completely missed the point(something I'm quite good at )

 

[wavepicker]

Re: XAO Analysis

morning wavepicker,
interesting thoughts

By that I mean, the MA won't arrive at the current price action until 'x' periods(whatever the displacement is) after the current bar.

Do just estimate where it wil be when it catches up? Or have I completely missed the point(something I'm quite good at )

What you have just described above is what happens when using a MA in a conventional manner. However the way I have plotted the MA on the chart, the MA is reflective of the current price bar at that particular moment in time.

When corrected, you will see that the MA is no longer either above or below the price action as used in a conventional manner. Rather the MA is now "centered". When we have small deviations either way from the MA( a slower than normal rate of price change), this would suggest for the current trend to persist (Cycle is damped). When we have large deviation from the MA to an extreme(markets tend to reverse after a climax of some sort). The beauty of a market that has reached an extreme is that you can then estimate with reasonable accuracy where price will find either support or resistance in the subsequent move, because the subsequent move will move exactly the distance from the extreme point to the MA but in the opposite direction.

It should be stressed that this approach is very much to be used for taking contrarian positions. It is also hugely dependant on the span of the MA you decide to use(which in itself must be a close approximation of the dominant cycle)

 

[CanOz]

Re: XAO Analysis

Hi CanAU - you prob need a trend line along support, which would give a descending triangle - bearish continuation pattern. fwiw out of hours we're down to low 5,700's so appears to have played out as a bearish triangle anyway (with the benefit of hidsight mind! )

hope this helps!

Ed

http://stockcharts.com/school/doku....t_analysis:chart_patterns:descending_triangle

Thanks mate, i was just wondering how relevant the pattern might be on such a short term chart. I'm really interested in the SPI and XAO/XJO analysis, but i have no idea if the the same patterns and trend analysis i use for daily and weekly charts can be applied to the SPI's 5 minute charts.

The trend had jumped out at me and i was curious. Funny though, how i didn't even see the decending triangle.

Cheers,

 

[professor_frink]

Re: XAO Analysis

What you have just described above is what happens when using a MA in a conventional manner. However the way I have plotted the MA on the chart, the MA is reflective of the current price bar at that particular moment in time.

When corrected, you will see that the MA is no longer either above or below the price action as used in a conventional manner. Rather the MA is now "centered". When we have small deviations either way from the MA( a slower than normal rate of price change), this would suggest for the current trend to persist (Cycle is damped). When we have large deviation from the MA to an extreme(markets tend to reverse after a climax of some sort). The beauty of a market that has reached an extreme is that you can then estimate with reasonable accuracy where price will find either support or resistance in the subsequent move, because the subsequent move will move exactly the distance from the extreme point to the MA but in the opposite direction.

It should be stressed that this approach is very much to be used for taking contrarian positions. It is also hugely dependant on the span of the MA you decide to use(which in itself must be a close approximation of the dominant cycle)

Sorry wavepicker, I probably should have put it slightly differently

How do you displace an MA backwards and have it showing a value at the current date?
I've attached a chart to illustrate. The green displaced MA, is behind the normal MA by the amount of the displacement.

Or is your idea of moving an MA backwards different to what a charting program does to it?