Stockmarkets: Technical Analysis

Discussion in 'Share Investing Strategies, Theories & Education' started by croseks, 18th Mar, 2020.

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  1. croseks

    croseks Well-Known Member

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    Hey everyone!

    Considering the current state of affairs there is a lot of talk about the stockmarket and a lot of the threads are more focused on the fundamentals that are affecting prices (CV-19, Stimulus packages, global debt etc...) so I thought it would be a good idea to have a technical thread focusing on different markets and ideas.

    Firstly, I am by no means an expert on anything finance, I am just learning through a combination of education and trial & error so by all means let's hear your thoughts and idea's whether for whole markets or individual stocks for how to navigate these turbulent times.


    I have charted the Dow Jones on the monthly going back to the 1974 lows. As you can see the market is behaving perfectly along the Fib levels with the current 200MA sitting at 50% retracement.
    From convergence taking place, the market started to lose steam around Jan 2018 and this was the signal to start to get out.

    The first support is at ~18,500pts and there should be a dead cat bounce from these levels. I think it will sink further to find support around 15,000pts which would be a 50% retracement. (GFC was 54% retracement from all time highs in 2007)

    DJI.JPG

    What are peoples thought's? Do you think the market will get to these lows?
     
  2. croseks

    croseks Well-Known Member

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    Text book play by the Dow :)

    Screen Shot 2020-03-24 at 8.55.50 am.png
     
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  3. Islay

    Islay Well-Known Member

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    I have no idea about TA or reading charts @croseks but I do look at them when people post them. I look forward to the day when you and others start to talk about resistance to the upside instead of dead cat bounces and support to the downside. Thanks for your posts :)
     
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  4. Fargo

    Fargo Well-Known Member

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    Buggered if I know why people waste time worrying about the market and dont take up the massive opporttunities that are dumped on their lap. Last week I named a whole bunch of businesses that have put me 20% in the green while the market is in the poo. Zoom one of my largest posistion is now up 50% in the last week and 107% for the month, Teladoc is up 35% in the last wednesday week since I suggested it trade desk 20%. Slack is up 33%, Nivida up 20% okta up 10%. I said at the time this could be the best buying opportunity in 3 lifetimes, You will miss it looking at charts containing companies that drag the market down Companies that can only benefit from current ciicumstance, get dragged down to by the mandate of funds to balance with the index and only fall because other dud companies are falling. All so had an extra 10% gain with FX rate.
     
    Last edited: 24th Mar, 2020
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  5. PKFFW

    PKFFW Well-Known Member

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    With your track record @Fargo I'd recommend contact Buffett and asking if he wants to repeat his $1mil bet about beating the market index over the long term. ;)
     
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  6. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    Are you trading or holding? Because there's a fair chance they'll turn around just as fast once the crisis is over and everyone's back to work.
     
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  7. Brady

    Brady Well-Known Member

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    @croseks nailed the Dow with ~11%... bounce.
    CBA support level...

    Do you have charts for XAO?
     
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  8. mrdobalina

    mrdobalina Well-Known Member

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    I agree this recovery is a bull trap. Next level is 61.8 fib line which lines up with your 15,300 support level
     
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  9. RiMo

    RiMo Well-Known Member

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    Yup, the rally will be short lived because things are far from being able to be resolved quickly.
    "This is a medical issue and we are trying to solve it with financial measures."
    Randy Frederick, Vice President of Trading and Derivatives at The Schwab Centre for Financial Research.
     
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  10. Brumbie

    Brumbie Well-Known Member

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    I agree roughly with your fib levels. Mostly likely a bull trap here. Too much bad news coming. We have no data yet. Still getting mostly Feb data. Wait till Friday our time. US initial jobless claims. Forecast for 1m up from 281k. This will decide the size of the trap.
     
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  11. croseks

    croseks Well-Known Member

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    Yeah the figures are scary, I have seen an article that just yesterday alone there was 280,000 new Centerlink applicants throughout Australia... I know a few friends who have already lost their main income so the economic affects of the virus are still not priced in correctly I think.

    The DOW rally is already looking like it's run out of steam. 20% Rally in 2 days. Friday could be another big red day by the looks of it.
    Screen Shot 2020-03-26 at 2.37.51 pm.png
     
  12. croseks

    croseks Well-Known Member

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    All Ords XAO is still holding its uptrend in tact and is looking like it will continue to do so, I would be expecting a low of around ~4000pts with solid support, at that level it would have a 44% retracement from all time highs compared to 55% during GFC.
    Screen Shot 2020-03-26 at 2.54.34 pm.png


    XAO has less to fall than the DOW as when you compare them both you can see how much more ahead the DOW is.
    Screen Shot 2020-03-26 at 2.59.08 pm.png
     
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  13. mrdobalina

    mrdobalina Well-Known Member

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    Agree. Market already priced in the stimulus package on Tues. Wednesday's 2% rise on the day the package was confirmed is pretty weak.
     
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  14. croseks

    croseks Well-Known Member

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    Here is an interesting chart I ran across and thought some would appreciate, the below is an ETF and it shows just how quickly an ETF can collapse once it's no longer profitable. The underlying bank is UBS. This is an extreme example but I would never put a significant portion of my wealth in an ETF.

    From $44 to $0.44 in less than 12 months. DCA anyone? :rolleyes:

    Screen Shot 2020-03-26 at 9.11.49 pm.png
     
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  15. Nakan

    Nakan Member

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    Croseks could you give a rookie some share advice outside eft's? I was going to DCA a VAS, VTS/VEU split but after reading your comment I'd like to hear your opinion. I'm aware of Peter Thornhill's LIC approach which has been very kind to him. Do you put LIC's in the same basket as ETF's?

    I currently hold a small portfolio of QAN, WEB, CUV, VTS and VEU. 10 year plus timeframe with a strong tolerance to risk.

    Btw I enjoy your charts and explanations.
     
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  16. Perthguy

    Perthguy Well-Known Member

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    I don't think it is valid to compare that to and ETF like VAS.

    I would suggest as well as asking advice on a property forum... do your own research.
     
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  17. Nakan

    Nakan Member

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    Gotcha

    As well as lurking here I get around on other forums, AusFinance, fiaustralia, fire blogs and finance/property related pods. I'm willing to take advice from anyone who knows more about a subject than me. I don't believe we ever stop learning and it's all part of my research.

    Cheers
     
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  18. blob2004

    blob2004 Well-Known Member

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    Your post is incredibly misinforming and wrong - an ETF is merely a vehicle that the funds flow through, it is your underlying fund that is the problem.

    You chose to use a 3 times leveraged crude oil fund to give your example. That shows nothing of the ETF structure and just shows how hammered the oil sector is in the current environment, especially under leverage.

    You should read up on vanilla index ETF's and how they work. They remain a sensible option for long term investors to DCA.
     
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  19. croseks

    croseks Well-Known Member

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    All that it is showing is that once an ETF becomes unprofitable the fund can just close it at any time, which is what happened here. The huge price decline was triggered by the WTI Bloomberg index however the fund itself is selling it down as much as possible as they have to buy back the securities from investors on the Call Date and of course they want to buy it back for the smallest amount possible, this can happen to any ETF. But like I said, extreme example.
     
  20. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    Truth is, ANY product can have a chart like that.
    Doesn't matter what's underlying it, the price tells the story.

    Technical analysis isn't hard - if it's going down, best not to buy it. If it's going up, go for your life. Then you just need to create your own strategy around that basic premise.
     
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