Pretty much the same sorta conclusions as peeps on RedBackas thread.. different mthodolgy, and thought I'd leave Red and Barnsty to head butt each other for a bit and post this quietly over here.
I must confess, I do not care for news, fundamentals or anythng but Technical analysis when I am in my crazy charting world. To me, it is distracting noise, and I think the current example of the US car bailout, the SFE debacle on Friday night and various other things enable me to justify this viewpoint... Not to say news is not important... just it confuses me.
let's run some specifics on the car bailout first...
Oh No! the big three need a bailout... It's okay! they are going to be rescued cos they are too big to fail Oh no! the executives went to the whitehouse in private jets, they are arrogant and money grubbing Oh no! Congress doesn't like the arrogance It's okay! they'll help them out if they get humble Oh No! a congresswoman refuses to use energy innovation money to bail them It's okay! They can use the TARP oh no! they are only gonna help them out for half of what they want It's okay! they can survive 'til Obama gets in Oh No! the unions wont let go of their pension plans and $70 an hour (!!!) wages, COngress won't pass the bill It's Okay! Bush has said they will rescue them...
LOL
Righty, enuff of that... here's some XJO charting a la wink.. Executive summary at the bottom of this post for those that want it.
Throwing in everything from channels to three wave corrective structures to Whooshka Conjecture
The case for the upside medium term (week)
Channels
Looking at the hourly chart, going back to the last major low on the 21st November:
I have marked out a channel with light blue thick lines...(Hat tip to Voltaire for recently showing channel stuff recently on the XJO thread)
A breakout occurs at the 6th of december, and a bit of a spurt ensues... the spurt dies off and the channel is retested.
Couple of extra bits to support channel breakout... fourth hit of the top, and breakout... positive to more upside.
Big unknown but another thing about channels and wedges that I have heard and seen demonstrated... "If Price enters from the top, price leaves through the top. If Price enters through the bottom, price leaves through the bottom" Now, I'm saying price entered into this pattern from the top at point 1... that is open to interpretation...
So bearing those three things in mind, I am offering the conjecture, channel based that we are due more upside, over the next week.
There are downside possibilities.. eg We could conceivably hit the channel top again and break back through... the discerning will notice in the above chart that once more, price is in another channel, narrower and higher than the one marked in blue. a fourth hit down could mean a breakout from the smaller channel will ensue. More about that in my downside viewpoint below.
Three Wave Corrective Structures (3wcs)
Looking at the hourly chart once more...
I have marked out what I beleive is a 3wcs in red, this is what is known as a bullish 3wcs... why, cos it is a corrective structure, and expectation is that it will retrace at least to the point that it started. (note to help in understanding the 3wcs, i have copied the first wave and placed it as a dotted line at the point the third wave begins. This demonstrates the nature of a 3wcs where the height of the first wave is very close to the height of the third wave) we're halfway up that retrace, I reckon, Price target 3750, timespan... coupla days.
Wanna see one of them bullish 3wcs's in action? 'Course ya do! Here's one on a lesser time span, kinda predicting the bounce on Friday after cash. The Big Gap is where the Sydney Futures Exchange had an unexplained technical problem...
As can be seen, price retraced, and more, the bullish 3wcs marked in green.
'kay back to the upside case...and another chart:
In this one I am actually using the 3wcs backwards, that is I am conjecturing that we are in the process of tracing them out now. Same style as the previous two I've shown,where I have marked out the third leg as the dotted line.... Yuppers, these are both bearish, that is, once completed they would be
suggesting downside... but they aint completed yet. Target on the littlun (green) is 3800, target on the big one (orange) 4000.
WHooshka/MACD stuff
orright... my forte...
Firstly here's the only real potential upside Right now, and that is purely divergence on the MACD Histos... with price... this means nothing... it's only the first signal, we need price to fall and MACD MAvs to rise for this to signal whooska style upside (Definition of Whooshka.. Price falls while MACD Histos rise, then price falls while MACD mavs ris, then whooshka occurs) so ... we're not ready for the Whooska here yet... but if second signal pans out... my target conjecture is that price will retrace back to resistance before divergence began on the
histograms.. time marked by thin vertical line, price marked by thick horizontal line... Price target around 3680... not circled gap as well which I expect to be somewhat magnetic.
The case for the downside Shorter term (intra day/days)
Channels
Looking at the hourly chart from a differnt perspective on channels
I've marked out the latest price action ass a channel (blue lines) and a conjecture of where price could go.. This does allow for a retest of the previous low of 3314 visited on dec 6th. Note, the final leg of potential price movement is purely 'cos I am longer term bullish... justifiable.... no.
WHooshka/MACD stuff
Down to the nitty gritty 5 min chart
'kay.. this action occurred after cash close on our markets.. signals can be a little unclear, but it sure looks like downside short term to me with signals one and 2 for downside marked. My target for the downside is shown by the blue cross hairs, which give us around 3510 or so.
What goes on from there.. I have no idea...
Executive summary...
In the short term, intraday for monday and possibly monday night thru tuesday, we could see downside. Initial target 3510 with further possible falls to I don't know where, but previous low of 3414 ish could be there.
Once the low is hit, I beleive we will see upside with valid targets of 3750, 3800 and 4000 being available.
However and ultimately... I do expect the whole lot to retrace and retest 3200 before concerted week+ long rises may occur.
(20min delay)