XAO Technical Analysis

[kennas]

Just thought I'd start a thread just on analysing the XAO. Anyone who has a diffent version of where they think the All Ords might be heading please feel free to post an alternate, or different perspective.

This might be an opportnity for any other T/As to put their particular analysis on where the XAO is going. Fib? Gann? EW? Would like to see any of that overlayed on my simple charting.

By my reckoning looks to be getting heady again. In the upper ranges of the general tend, hovering on upper BB and over 80 on stochastics. Might be due for a pause. Support established at 5100, which might be around where it'll pull back to and where the 200d ma will probably hit the line if it does fall back to that level. MACD turning which could also indicate the start of some more consolidation, before heading north again.

[tech/a]

Kennas.

Radge called the last XAO low at The 4700 type level and called a wave five at around the 5400 level from memory.I cant find his post on this,but I do remember I was impressed by the accuracy.
Perhaps he will comment.
I do notice when volatlity increases then the index comes off.
There is no real volatility in the current trend so I think all is safe for the bulls currently.

[swingstar]

tech, did he say a wave 5 from 4700 will end at 5400?

[wavepicker]

Just thought I'd start a thread just on analysing the XAO. Anyone who has a diffent version of where they think the All Ords might be heading please feel free to post an alternate, or different perspective.

This might be an opportnity for any other T/As to put their particular analysis on where the XAO is going. Fib? Gann? EW? Would like to see any of that overlayed on my simple charting.

By my reckoning looks to be getting heady again. In the upper ranges of the general tend, hovering on upper BB and over 80 on stochastics. Might be due for a pause. Support established at 5100, which might be around where it'll pull back to and where the 200d ma will probably hit the line if it does fall back to that level. MACD turning which could also indicate the start of some more consolidation, before heading north again.

Hi Kennas,

Have been stewing over the XAO for a while now. Looking at a long term chart from an EW perspective we are in the later stages of cycle wave 3. Thought this impulse had finsihed back in May, when we succesfully shorted. The mid point of the first leg of the correction was expected to end at 4716(actual was 4726pts). Expected the market to trend sideways for some months before breaking to lower levels to finish that first leg of a multi year sideways move. Instead we got the sideways move but the market broke higher.
However all that has done is confirmed that this correction we have had was 4th wave. If this is the case it should be the last move up in this cylce wave 3 and end the bull phase for quite a while.

Wave 4 contracting triangles precede the last move in an impulse (wave 5). The move out of such of a formation is short, swift and is called a thrust. It length on many occasions is approximately equal to the height of the triangle. In this case the the terminus of the triangle is at 4931 pts, and the height of the triangle is 694 pts. Thus an approximate target would be 4931+694 = 5625 pts. Of course it could a little lower or higher and the primary consideration is to count 5 waves in this last leg. It should be noted that this figure also would be the point of the upper trend channel when extended from the top of red wave 3. Wave 5's are on many occasions accompanied with a divergence in the MACD or other osicaltors. If they start to roll over this could be a confirmation. Also there is less participation in a wave 5 compared to the previous third wave and the volume thins out.

Primitive trend channels on occassion are not accurate, therefore have constructed curvilinear channels based on cycles. These look like Bollingers but are not as they have the lag removed, and are projected forward using curve fittin techniques. When the inner cycle intersects with outer cycle we have reliable pivot points where a trend change is a high probability. In this case, the 5400-5600 area is one of major resistance in terms of time and price. Bollingers are a waste of time unless you take the lag out of the equation.

have charts, but unable to upload due to size limits imposed by this site

Hope this helps

[swingstar]

have charts, but unable to upload due to size limits imposed by this site

Hi wavepicker

You might be able to upload them at http://www.tinypic.com, if not PM me and I can upload them (I'll give you my email to send).

Cheers

[tech/a]

tech, did he say a wave 5 from 4700 will end at 5400?

Yes,cant remember exact figures----they werent round.

[Porper]

tech, did he say a wave 5 from 4700 will end at 5400?

That is correct Swingstar, about 4750 and called the top of wave 5 at 5400.

[kennas]

I don't really understand EW that well but have enclosed what I think might be the count in the bull run that started in 03.

My count has us already having reached a stage 5 and we've just had a significant corrective down wave A, B, C. Now heading in an upward cycle again. This count seems a bit arbitrary to me however, and I've had to adjust the chart to my count.....

I'm not sure what type of cylce we are in. (Primary? Cylcle? Supercycle?)

I also don't have the ability to place Fibonacci numbers on my charts so can't use that confirm my count, or give it more fidelity.

In my research on EW I found a couple of interesting quotes:

"if you put 10 Elliott Wave analysts in a room, you'll get 12 opinions".

"Elliott Wave called 10 of the last 3 crashes."

Having said that, I am very keen to understand this and test it, and incorporate it with all the other information available on business cyles, geopolitics, and even Gann.....

[Kauri]

Kennas,
I'm not up on E/W much myself but one rule that seems set in stone is that W3 can never be the shortest wave.

[wavepicker]

In my research on EW I found a couple of interesting quotes:

"if you put 10 Elliott Wave analysts in a room, you'll get 12 opinions".

This true, but you can have various wavecounts and they can all pointing to the same thing. When that happens you know you are on a winner.

"Elliott Wave called 10 of the last 3 crashes."

I presume you are referring to Bob Prechter. He picked the bull run of the 80's in 1978 when everyone was bearish he then picked the top when everyone was bullish and told his subscribers to exit the mkt in 87, 1.5 weeks before the crash. he called the peaks in the Nikkei 225 in 1990 and the peak of the Nasdaq.

However he has also been repeatedly wrong calling for a top in the DJIA since 1995 and has been woefully wrong.

Elliott Wavers like other TA practioners make heaps of mistakes, they also make stunning forecasts. Unfortunately that is the nature of the business we are in and when dealing with probabilities of future price movement.

Cheers

[kennas]

Elliott Wavers like other TA practioners make heaps of mistakes, they also make stunning forecasts. Unfortunately that is the nature of the business we are in and when dealing with probabilities of future price movement.

Cheers

Yep, the key seems to be 'probabilities' with all T/A, and when you combine that with other market factors you can get a clearer picture of what direction certain stocks, or the XAO, might go it.

Wavepicker, do you look at T/A first, or F/A when trying to decide on a stocks movement? Or does T/A factor in F/A and thereore you don't need to look at it?

Sorry if you've already gone through this on the T/A v F/A thread..

[nizar]

I presume you are referring to Bob Prechter. He picked the bull run of the 80's in 1978 when everyone was bearish he then picked the top when everyone was bullish and told his subscribers to exit the mkt in 87, 1.5 weeks before the crash. he called the peaks in the Nikkei 225 in 1990 and the peak of the Nasdaq.

Thats a VERY impressive record. He and his followers mustve made a bucketload during those times.

[GreatPig]

Thats a VERY impressive record

Well if you make enough predictions about everything, you'll eventually get a few spectacularly right.

GP

[wavepicker]

Thats a VERY impressive record. He and his followers mustve made a bucketload during those times.

Every Guru has his day I suppose. All it takes is 1 or 2 bad calls and their reputation dies very fast. He did win the 1984 trading championship with a 444% gain in 4 months which was a record back then. (There have been much bigger gains in comps since then)

Where he came apart was with his long term forecasts. Forecasting in the short term is hard enough, but making a very long term forecast is something else!!


Cheers

[It's Snake Pliskin]

Every Guru has his day I suppose. All it takes is 1 or 2 bad calls and their reputation dies very fast. He did win the 1984 trading championship with a 444% gain in 4 months which was a record back then. (There have been much bigger gains in comps since then)

Where he came apart was with his long term forecasts. Forecasting in the short term is hard enough, but making a very long term forecast is something else!!

Cheers

Hi,

I've been out drinking so please excuse my arrogance. Superman, Batman, and Spiderman would struggle to be accurate with longterm forecasts. In fact nobody can be accurate with long term forecasts, and I mean LONG-TERM.

Enjoy your day

[Wilma]

Hi,

.......In fact nobody can be accurate with long term forecasts, and I mean LONG-TERM.

Enjoy your day

This is not an accurate statement imo.

LONG-TERM is a relative term and could mean different time-frames. LONG-TERM for a true day trader who doesn't hold open positions overnight might say a week is LONG-TERM. An investor might say LONG-TERM is months or years.

Either way, it is possible for someone to be accurate with LONG-TERM forecasts. Their credibility should be based on the percentage of times their forecasts eventuate.

Forecasting should also include the probability of the forecast eventuating.

[It's Snake Pliskin]

LONG-TERM is a relative term and could mean different time-frames. LONG-TERM for a true day trader who doesn't hold open positions overnight might say a week is LONG-TERM. An investor might say LONG-TERM is months or years.

Either way, it is possible for someone to be accurate with LONG-TERM forecasts. Their credibility should be based on the percentage of times their forecasts eventuate.

Wilma,

For the purposes of this thread it might be better to keep it SIMPLE as most would - using fractals of time only complicates things. Refer to the quotes from Dic.com.

Quote: Dictionary.com
day trader
n.
A speculator who buys and sells securities on the basis of small short-term price movements.

long-term 

–adjective 1. covering a relatively long period of time: a long-term lease.
2. maturing over or after a relatively long period of time: a long-term loan; a long-term bond.
3. (of a capital gain or loss) derived from the sale or exchange of an asset held for more than a specified time, as six months or one year.

[rosie]

fwiw the XAO at the May high squared out the price range from 21/3//05-5/5/05...370 points. 370 days from 5/5/05 was the May high. 370 days-/+ has been a valid period previously with the XAO/SPI. Thurs, was 370 days from 21/10/05 low. The next important time vibe using that square is 11/11/06. IF this is a valid higher double bottom the Index has much further to climb, when l look at stocks many appear to be struggling (over lapping waves) the Index itself has taken a long time to climb back up, 35 days to go down & 135 days to get back the same point.

[kennas]

Some fundamental factors that lead me to think we are going to push through to all time highs in the near term include:

Interest rate rise is factored in.
Leading into the Christmas Cheer period.
Commodities are holding, with some rising considerably.
Oil looks to be going to hold around $60.00.
POG looks to have made a higher low, perhaps set to turn and break through $600.
Companys have reported faily well over the past few weeks. No surprises.
M&A speculation and activity will keep some stocks fully priced for a while.
US inflation seems to be contained, although there are mixed signals.
Regional geopolitics settled a little with Thailand and Nth Korea stable, for the moment.
There are a much higher than average number of people logged into ASF on a daily basis.
The pe ratio for the XAO is below long term trend. (Read this a few days ago, haven't got the figure)
The Bull is back!

So, I think that could pull back to 5200 in the short term and probably find a bit of support there, or worst case 5100 where it should bounce, and then push through 5400 by the end of the year. If good news keeps coming out of the US, then perhaps it'll just keep pushing on up....

[nizar]

Some fundamental factors that lead me to think we are going to push through to all time highs in the near term include:

Interest rate rise is factored in.
Leading into the Christmas Cheer period.
Commodities are holding, with some rising considerably.
Oil looks to be going to hold around $60.00.
POG looks to have made a higher low, perhaps set to turn and break through $600.
Companys have reported faily well over the past few weeks. No surprises.
M&A speculation and activity will keep some stocks fully priced for a while.
US inflation seems to be contained, although there are mixed signals.
Regional geopolitics settled a little with Thailand and Nth Korea stable, for the moment.
There are a much higher than average number of people logged into ASF on a daily basis.
The pe ratio for the XAO is below long term trend. (Read this a few days ago, haven't got the figure)
The Bull is back!

So, I think that could pull back to 5200 in the short term and probably find a bit of support there, or worst case 5100 where it should bounce, and then push through 5400 by the end of the year. If good news keeps coming out of the US, then perhaps it'll just keep pushing on up....

Agree. THis is also the way i see things. I think current PE is 13, compared to a historical average of 15, or something along those lines.

I think the next push upwards will be more based on oil/gold and the resource stocks leading the way just like january-may this year.

But it'll be really nice if this rally blends into the seasonal Santa Claus rally.