I thought I might point out some useful observations regarding how the XAO moves, and where new swings often start from. I'm also going to post up a more detailed daily chart of the XAO just as a reference point( not to trade off)
If you look at this weekly chart below, you can see that price has often started new swings off 50% retracement points from previous ranges. This is a really interesting observation someone allured me to awhile ago, and although markets often revert back to the mean/ mid-point, this is something you certainly don't see as often in other markets. Knowing that the XAO gravitates towards 50% retracement points, can be very useful when trying to establish where a new swing might start from
Further below is a more detailed version of the daily XAO chart I posted earlier. Basically if you take the last range( low to high), the 50% retracement is around the same point as that swing low( 5307) that started the move to the recent high. So that swing low could be a key turning point, where price perhaps finds support, or takes it out and perhaps capitulates down to the lows I mentioned(5072 & 5037). Or ideally, it could show a weak 1-2 bar counter trend to find resistance under that key swing low & under the 50% retracement( Which for me is an ideal sell signal).
What you'll also see on this chart is a Gann box technique used over the same range that gave us the 50% retracement. Simply put, the 1x1 angle is usually the key angle to look at in these Gann style boxes. The idea is that once price moves below a 1x1 angle then you should only be looking to sell. This technique also gives us a timing factor which helps further determine key turning points, so when a 1x1 angle hits the top of a range, or 50% of a range, then it often signals a turning point in price. In this case, the most obvious turning point would be around the middle of next month( yellow circle)
Although this chart might look promising to some people( and very confusing to others), don't be fooled, things rarely play out exactly as planned. Price could easily turn around and shoot off to new highs- i'm certainly not ruling that out. This chart is not trying to 'forecast the future, it's just there to help make decisions "IF" price is to reach certain levels at certain points in time. I'm just using it to help gauge a sense of direction...
