Friday, February 17, 2012

XAO Short Term Update

The sideways correction on the XAO still has some more 'sideways' to go. The last XAO post indicated a possible move down to the 4200 levels (maybe lower to 4150) to complete wave 'd', this appears to be occurring as anticipated, once complete, a push up to complete wave 'e' is needed. This next set of moves should complete one of the largest Double Three Combination corrections seen on the XAO.

The Australian Job market appears to be catching up to the bearish social mood with several major brands announcing job cuts this week. I don't believe the cuts are significant at the moment as I'm expecting a much larger round of cuts if the market falls as anticipated. Major job cuts tend to occur near the market bottom when conditions are the worst.

As for the chart below, the index needs to keep within the approximate boundaries for the time being so waves 'd' and 'e' can complete. A premature push out of the triangle with momentum could be an indication that the short term count is not accurate - or as triangles love to do, create uncertainty.

Saturday, February 11, 2012

Interest Rates - RBA asleep at the wheel?

The RBA must have struggled to put verbiage together this week in order to make their very important interest rate decision. Regurgitating views we already know: the usual waffle on Europe we've seen for months now in all the financial media; Food Prices are unwinding (Thanks to Coles supermarket - lucky they slapped together a discount advertising campaign otherwise the RBA minutes would be a sentence shorter), unemployment has risen; etc etc.

Is anyone awake at the RBA and looked out the window? The verbiage is wonderful, but a cursory glance at the 90 day bill rate shows that is has changed very little over the last few months. The 90 day rate is at 4.39% v's the RBA Cash rate target of  4.25%. The RBA "cash rate target" lag of the 90 day bill rate is on average 0.15%, and guess what - the RBA lag is 0.14% as of Thursday, almost bang on average.

Next month I'll get out of bed a little earlier and put up the updated charts of the 90 day v's the RBA cash rate target - and make a way out guess on what the decision will be.

Monday, February 6, 2012

XAO Brief Update

With a small break above the recent high today, indicates that a different wave pattern may be unfolding for the short term count. This Double three combination correction is still in play and a primary count, but this leg up may be wave 'c' of the triangle.

The rationale behind this is that the structure that commenced on the 25th Nov 2011 (end of wave 'b' in the previous chart) to now - is a flat and considered wave 'c'. The last leg up is in 5 waves, leading to a 3-3-5 structure ending at around 4400.

The short term view is for more sideways action on the XAO, heading down to 4200 to complete wave 'd'.

Wednesday, February 1, 2012

XAO Short Term update

The XAO should have completed the Double Three Correction. Downside should now follow...