Tuesday, September 28, 2010

Long Term XAO - multiple areas of resistance

The XAO has encountered several areas of resistance shown and/or discussed in the chart below - this should indicate caution as a potential change in trend is at hand. Also on the shorter term, it appears 5 waves up can be considered complete for wave (c) within the large wave '2' structure discussed in previous posts.

Breaking confidently higher (esp on higher volume) would indicate an alternative count is possibly unfolding at least in the short term.

Thursday, September 23, 2010

Wave 2 near 61.8% Retracement

Wave '2' has almost reached  the 61.8% retrace level and wave (c) appears to be at an end or very close depending on how the subdivisions are counted.

Also, on XAO volume  (not shown below), since the 16th of Sept the volume on the XAO has fallen to very low levels. Changes in volume do occur near the start/end of waves and can help identify changes in trend and is most accurately viewed on the daily charts.

Tuesday, September 14, 2010

All Ordinaries near critical juncture

The XAO has continued to stay within the up-sloping channel for wave (c) and there is potential for the XAO to continue higher under the wave count shown below.

Wave '2" details
The first chart shows the bigger picture with the 2nd flat reaching a critical point - it is at the top of the overall wave '2' channel and I suspect it will have enough momentum to break through and cotinue higher to near the 61.8% retrace at 4723. At this level, wave (c) will also reach the top of the green channel that represents the typical boundaries of a flat correction - in this case the 2nd flat.

Wave (c) details.
The detail count of wave (c) is shown below and indicates there is still a need to push higher before the final 5th wave (which is sub-dividing) completes.

Wednesday, September 8, 2010

XAO Wave 2 of 'C' Circle - Updated

In the last post, I discussed a break above 4620 would invalidate the current count - slightly. The break to 4628, a mere 8 points and the upwards thrust that appears to be 5 waves (wave (c) ) provides additional insight for wave '2'. Basically, wave '2' is still unfolding - but as a double flat correction as shown below.

There is still room to move on the upside as it appears that wave (c) isn't quite complete. For completion, a small drop today then a push higher would finish this wave over the next several days.  A target area of around 4640-50 would be ideal and form a double top from June. Breaking confidently down thru the up-trending channel lines (shown) for wave (c) before heading higher(<--correction) could be a strong indication that wave (c) is already complete.

The overall XAO view can be found here for wave 'C' circle

Sunday, September 5, 2010

XAO must stay under 4620

The All Ordinaries index must stay below 4620 for the current wave count to be valid. A break above this level will either:
  • indicate further wave '2' action, or
  • indicate that wave 'B' circle is yet to finish and will break higher again. If the index continues higher from here, then the correction that started in mid-april may be considered a triangle - indicating an upcoming change in trend in the medium term.
On the very short term,  it appears an ending diagonal could be under development since last Wednesday and one more small 3 wave push upwards is needed to finish this leg.  For the ending diagonal to remain valid, the index cannot climb above 4605 (wave 3's cannot be the shortest waves). On the technical front, the RSI and MACD price oscillator are in oversold territories indicating a short term correction or change in trend may be at hand. Will the Luna half moon from last Thursday still have a say in the short term? It still has another day or two to prove itself.

Wednesday, September 1, 2010

Luna Lunacy on the XAO

Yes Yes, I know what you're thinking, but you see, I just have to know....

...and the correlation between lunar cycles seems uncanny with the short term changes in trend with the XAO by + 1 day. The key signal appears to be the half moon cycles that represent a greater share of the trend changes than any other luna phase.

Yesterday, I discussed the very real possibility of the XAO climbing to complete a 5 wave move to complete wave (ii) as a flat. This is occurring today and thus, a change in trend may indeed be at hand and will tie nicely with the half moon phase tomorrow.

It'll be interesting to see how the half moon phase theory holds up over a longer time period. It'll also be interesting if specific moon phases favour any particular waves and degrees of trend.