XAO Technical Analysis

[nizar]

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

Yeah i think that trendline is significant.
Below 5400 and it could be all over.
Agree with Kennas also, XAO is likely to move closer to the 200dma like on previous corrections before we can continue the uptrend.

 

[Sean K]

Re: XAO Analysis

Yeah i think that trendline is significant.
Below 5400 and it could be all over.

Unless the States implodes then I think the market might keep going after this correction. Too much money floating about, Future Fund, profits still going up, Baby Boombers selling houses.....Hopefully the market can keep going until China starts consuming the majority of it's own trinkets and doesn't realy on the US consumer. Few years off yet perhaps.

 

[>Apocalypto<]

Re: XAO Analysis

Kennas

I tend to agree with you, I do not think this is the end of days even if it does drop below 5400.

from looking at the weekly asx chart and going by what a healthy trend looks like we have not had a real correction yet on either the weekly or the monthly chart.

I am not a bear yet, just in case I wont be quiting the day job anytime soon!

 

[Sean K]

Re: XAO Analysis

Hitting support at 5700 ish, fallen through BB, oversold on Stochastics, MACD divergence looking silly, I anticipate a bit of a rest at this level and some bargain hunters to buy in. Could have another bad day, but in all probabilities should stabilise, maybe a short rally, before heading to the next support level perhaps.

 

[Magdoran]

Re: XAO Analysis

This is the problem with lagging indicator styles, and a real problem with high momentum bearish moves trying to use moving average/oscillators to calculate when and where the bullish counter tends are going to come for re-entry short, or for when to take profits when short.

The conventional use of this kind of approach in a classic ending diagonal pattern just doesn’t work, simply because these tools were specifically designed for gentler (bullish) markets. If you try to use these without understanding their limitations it may signal long entries in the middle of a fast move down - not what you want.

So RSI, stochastics, MACD, Bollinger bands etc are susceptible to high momentum bearish moves because they are lagging way too much, especially in fast moves based on fear. The price action and pattern I have found is a far better indication of probability – retracement tools can be beneficial used in conjunction with the pattern of trend and the price bars and volume. But the rationale behind bullish conventional thinking about volume is I believe an error. The underlying can accelerate down on very little volume. The lack of buyers can be just as powerful as an abundance of sellers. Get both and you have a capitulation move in the making.

Make no mistake about it, this is a fast move down. Just go back to the corrections in the past and look at the chart. Note the bullish counter trends and what they look like. They will come in this campaign, and may appear quite strong and sharp, but these represent SELLING opportunities currently from where I sit.

When obvious support is hit and a bounce occurs, this can often be a bull trap, and once the counter trend is done, the bearish drive may well continue with a vengeance.


Regards,



Magdoran

 

[Sean K]

Re: XAO Analysis

This is the problem with lagging indicator styles, and a real problem with high momentum bearish moves trying to use moving average/oscillators to calculate when and where the bullish counter tends are going to come for re-entry short, or for when to take profits when short.

The conventional use of this kind of approach in a classic ending diagonal pattern just doesn’t work, simply because these tools were specifically designed for gentler (bullish) markets. If you try to use these without understanding their limitations it may signal long entries in the middle of a fast move down - not what you want.

So RSI, stochastics, MACD, Bollinger bands etc are susceptible to high momentum bearish moves because they are lagging way too much, especially in fast moves based on fear. The price action and pattern I have found is a far better indication of probability – retracement tools can be beneficial used in conjunction with the pattern of trend and the price bars and volume. But the rationale behind bullish conventional thinking about volume is I believe an error. The underlying can accelerate down on very little volume. The lack of buyers can be just as powerful as an abundance of sellers. Get both and you have a capitulation move in the making.

Make no mistake about it, this is a fast move down. Just go back to the corrections in the past and look at the chart. Note the bullish counter trends and what they look like. They will come in this campaign, and may appear quite strong and sharp, but these represent SELLING opportunities currently from where I sit.

When obvious support is hit and a bounce occurs, this can often be a bull trap, and once the counter trend is done, the bearish drive may well continue with a vengeance.

Regards,

Magdoran

Yes, lagging indicator which I use to confirm price action as many people might do. Combined with other indicators, and the price action we get a clearer picture. Sometimes. My point in the above was that there are a few indicators, plus the price reaching a support level that would lead to a reasonable conclusion that 5700 might be support, and there may be a rebound from here.

Totally agree with a counter trend. Investors may think they have seen a bottom and start picking up 'bargains', only to see then next fall. Wave C perhaps. As I've said, I estimate this to end at 5450 ish support.

All the indicators have a place IMO, even BB in this case. But none of them should be used in isolation, which I do not.

Just my opinion based on the probabilities lining up. Hope I'm wrong for new investors gone long and can't see the long term picture at this moment.

All the best,
Sean

 

[YOUNG_TRADER]

Re: XAO Analysis

I estimate this to end at 5450 ish support.

Agree Sean, this is where I too see ultimate support, but if its tested now then I don't think we will see a May correction, unless the mkt recovers very very strongly after testing 5450,

 

[chops_a_must]

Re: XAO Analysis

Yes, lagging indicator which I use to confirm price action as many people might do. Combined with other indicators, and the price action we get a clearer picture. Sometimes. My point in the above was that there are a few indicators, plus the price reaching a support level that would lead to a reasonable conclusion that 5700 might be support, and there may be a rebound from here.

Totally agree with a counter trend. Investors may think they have seen a bottom and start picking up 'bargains', only to see then next fall. Wave C perhaps. As I've said, I estimate this to end at 5450 ish support.

Just looking at the chart there Kennas, I'm thinking 5650 is more likely to be support. Thus, lining it up quite well with what some people have predicted (~5260 [can't find where I read it right now]) as the 'bottom' in this particular move.

So RSI, stochastics, MACD, Bollinger bands etc are susceptible to high momentum bearish moves because they are lagging way too much, especially in fast moves based on fear. The price action and pattern I have found is a far better indication of probability – retracement tools can be beneficial used in conjunction with the pattern of trend and the price bars and volume. But the rationale behind bullish conventional thinking about volume is I believe an error. The underlying can accelerate down on very little volume. The lack of buyers can be just as powerful as an abundance of sellers. Get both and you have a capitulation move in the making.

And unless we see some stability/ recovery over the next night or two, capitulation is what we will get I think.

 

[Sean K]

Re: XAO Analysis

Just looking at the chart there Kennas, I'm thinking 5650 is more likely to be support.

And unless we see some stability/ recovery over the next night or two, capitulation is what we will get I think.

Yep, I agree, 5650 ish. I did have this posted a while ago, not sure why I've moved it up to 5700. Maybe just approximating. I'm not saying it will turn on an exact price, but somewhere around this level. Plus or minus a few points.

Just a probability, of course. There's too many factors at play to give a definitive, precise answer to the markets movements.

Mag seems to have found a way though.

If you're there Mag, can you refer me to the thread and time that you were calling the 'crash', and the price targets you nominated. Did you also give a target price for the drop? Cheers.

 

[Magdoran]

Re: XAO Analysis

Yep, I agree, 5650 ish. I did have this posted a while ago, not sure why I've moved it up to 5700. Maybe just approximating. I'm not saying it will turn on an exact price, but somewhere around this level. Plus or minus a few points.

Just a probability, of course. There's too many factors at play to give a definitive, precise answer to the markets movements.

Mag seems to have found a way though.

If you're there Mag, can you refer me to the thread and time that you were calling the 'crash', and the price targets you nominated. Did you also give a target price for the drop? Cheers.

Hello Kennas,


The price target was hard to work out for the last leg up until about 10 days out from the climax. The cycle was about as clear cut as they come, and allowed a good forecast in time from a month out – but the cycle had to be mature enough for me to calibrate everything.

This is the beginning I think of a bear campaign that may last for months… Best shot guess for this cycle to terminate currently is 18 July, but this really needs confirmation in the way the pattern plays out, and there are alternatives to this, but this is currently my highest probability (assuming this is a bear campaign in the weekly chart). I still need to confirm that the cycle that led to the high is still the dominant cycle, and this really requires more data. My assumption is that it is still valid currently.

14 March and 01 April are the next key time increments.

Price is more difficult. Three are 3 different time frames involved here. What time frame do you want? – what price and when? I can call some but not others with the current data and forecast…

Yes I do have targets for the drop of course… but there are many in different time frames…


Mag

 

[wavepicker]

Re: XAO Analysis

5700 may offer some "minor support", however to me is is quite clear this market will be visiting approx 5500 or perhaps sub 5500 before we get a countertrend. So until those lecvels are reached or close to being reached, I for one will remain short

 

[Magdoran]

Re: XAO Analysis

Yep, I agree, 5650 ish. I did have this posted a while ago, not sure why I've moved it up to 5700. Maybe just approximating. I'm not saying it will turn on an exact price, but somewhere around this level. Plus or minus a few points.

Just a probability, of course. There's too many factors at play to give a definitive, precise answer to the markets movements.

Mag seems to have found a way though.

If you're there Mag, can you refer me to the thread and time that you were calling the 'crash', and the price targets you nominated. Did you also give a target price for the drop? Cheers.

Sorry, the forecast was on the Trading the SPI Gann thread, but that was time based...

I have never posted my downside targets because they are complex... and involve time points and contingencies in the pattern.


Mag

 

[Magdoran]

Re: XAO Analysis

Yep, I agree, 5650 ish. I did have this posted a while ago, not sure why I've moved it up to 5700. Maybe just approximating. I'm not saying it will turn on an exact price, but somewhere around this level. Plus or minus a few points.

Just a probability, of course. There's too many factors at play to give a definitive, precise answer to the markets movements.

Mag seems to have found a way though.

If you're there Mag, can you refer me to the thread and time that you were calling the 'crash', and the price targets you nominated. Did you also give a target price for the drop? Cheers.

Ok, just pulled out my maximum crash target as an example by 18 July based on the cycle into the high, hence it is totally unconfirmed: 4178.48.

Don’t panic though since this is such a raw probability way to early to confirm, but as you can see, this is not of much value now, since it may never happen. It’s possible, but I have no way at this point of assigning probabilities…

 

[Sean K]

Re: XAO Analysis

Well, 5660 at the moment which is close enough to 5650 ish support. Might have another bad day, but I think a pause here could happen. I've gone though quite a few of the top 20 stocks and they are all reaching or just breaching support lines. I suppose this might be a test of this 'support level' theory. Stochastics are off the chart.

I'm expecting something like the May correction here.

 

[ducati916]

Re: XAO Analysis

That EMA, whatever it is [200EMA is my guess]
That's where you'll find support over the next 2/3 weeks.
Whether it'll hold remains to be seen.

If I was *technical* which I'm not, that's where I'd be looking to get back in long. Before that point, no chance baby.

Day-trades, different kettle of fish.
Trend trading..........200EMA

jog on
d998

 

[nizar]

Re: XAO Analysis

Well, 5660 at the moment which is close enough to 5650 ish support. Might have another bad day, but I think a pause here could happen. I've gone though quite a few of the top 20 stocks and they are all reaching or just breaching support lines. I suppose this might be a test of this 'support level' theory. Stochastics are off the chart.

I'm expecting something like the May correction here.

From May to September was like a 5month sideways market.

Id really prefer like Oct2005, 8% in 3 weeks. Then onwards and upwards again.

 

[Sean K]

Re: XAO Analysis

With weight of pressure down on the XAO, the 5650 support level may be bypassed for the next support at 5450 at this rate.

 

[CanOz]

Re: XAO Analysis

With weight of pressure down on the XAO, the 5650 support level may be bypassed for the next support at 5450 at this rate.

ON THE TICK ITS JUST BOUNCED OFF 5627.2

Cheers,

 

[Magdoran]

Re: XAO Analysis

With weight of pressure down on the XAO, the 5650 support level may be bypassed for the next support at 5450 at this rate.

Kennas,


How are you generating your “support” targets in price? What method are you using? Can you project a time point too, or is this linear horizontal support via a retracement method, or are you using some kind of moving average?

Can you project fairly precise areas of support consistently? If you’re trading this short, where will you take profits (partial or full)? Are you looking to play the bullish counter trend to?


Regards


Magdoran

 

[Sean K]

Re: XAO Analysis

Kennas,

How are you generating your “support” targets in price? What method are you using? Can you project a time point too, or is this linear horizontal support via a retracement method, or are you using some kind of moving average?

Can you project fairly precise areas of support consistently? If you’re trading this short, where will you take profits (partial or full)? Are you looking to play the bullish counter trend to?

Regards

Magdoran

Hi Mags, just previous highs and lows. Areas of conjestion. Previous highs should be support.

I'm starting to think however, that in radical moves like this, that these support and resistance lines become less valid.

They've certainly worked for me in the past. Buy support, sell at resistance...Pretty basic stuff, but has worked in a 'stable' market. Not sure how it works in this environment. Although, perhaps this is stable: A constant flow down hill....