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XAO Technical Analysis

Discussion in 'ASX Stock Chat' started by kennas, Oct 27, 2006.

  1. chris1983

    chris1983 Well-Known Member

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    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.
     
  2. kennas

    kennas hoarding tinned food

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    Re: XAO Analysis

    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...
     
  3. GreatPig

    GreatPig Pigs In Space

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    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
     
  4. Garpal Gumnut

    Garpal Gumnut Well-Known Member

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    Re: XAO Analysis

    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
     
  5. chris1983

    chris1983 Well-Known Member

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    Re: XAO Analysis

    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
     
  6. GreatPig

    GreatPig Pigs In Space

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    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
     

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  7. kennas

    kennas hoarding tinned food

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    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.
     

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  8. GreatPig

    GreatPig Pigs In Space

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    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 :D

    GP
     
  9. theasxgorilla

    theasxgorilla Problem solved... next bubble.

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    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.
     

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  10. wavepicker

    wavepicker Well-Known Member

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    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
     
  11. CanOz

    CanOz Every day above ground is a stellar day!

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    Re: XAO Analysis

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

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  12. kennas

    kennas hoarding tinned food

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    Re: XAO Analysis

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

    theasxgorilla Problem solved... next bubble.

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    Re: XAO Analysis

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

    CanOz Every day above ground is a stellar day!

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    Re: XAO Analysis

    Can someone shed some light on my query please?
     
  15. Edwood

    Edwood Well-Known Member

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    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
     
  16. wavepicker

    wavepicker Well-Known Member

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    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
     

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  17. professor_frink

    professor_frink Moderator

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    Re: XAO Analysis

    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 :D )
     
  18. wavepicker

    wavepicker Well-Known Member

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    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)
     
  19. CanOz

    CanOz Every day above ground is a stellar day!

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    Re: XAO Analysis

    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,
     
  20. professor_frink

    professor_frink Moderator

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    Re: XAO Analysis

    Sorry wavepicker, I probably should have put it slightly differently :eek:

    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?

    [​IMG]
     
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