Saturday, 11 August 2012

ASX 200 trending down, turning lower from false upside break of recent upwards corrective pattern

The ASX 200 is trending down, and is likely ending the recent upwards correction that has taken place within that down trend. It closed Friday afternoon ASX trading at 4277, then in after hours trade rallied to close the week at 4309.

The first chart is a log scale weekly chart illustrating the down trend from the 2007 peak, though to Friday's ASX close. This particular log scale chart shows a neat down trend channel. A move above 4400 is required for a bullish break from the trend channel.

Next I'll show the arithmetic scale chart for the same period. Others have been hanging their hat on the mid-week bullish trend line break on the arithmetic scale chart, but I have long preferred log scale on long term charts of the ASX 200. I use whichever scale shows neater trend channels for a particular market and time frame, largely due to my belief that market action unfolds in Elliott Waves. Trend channels are an integral part of the process of identifying both impulsive and corrective EW patterns. To my eyes, there is no trend channel on the arithmetic chart, so it doesn't suit my beliefs or plan to use it. You take your pick.

The next chart zooms in to the period since last October and includes after hours trading through to the end of the week. It illustrates that the ASX 200 is rolling over lower after a false upside break from a slightly wedgy upwards corrective pattern.

S&P 500 stuck between two trend lines

DAX megaphone pattern is complete, or nearly so

The DAX megaphone pattern is at or near an end. The megaphone in the current context is a bearish set up. It must soon either lead to a swift move lower, or morph in to another pattern.

AUD/USD faltering at top of recent up trend channel

The AUD/USD is faltering at the top of the recent up trend channel, though I wouldn't say it has rolled over lower yet. I've redrawn the trend channel slightly from previous posts, looks a better fit.

EUR/USD turns lower from retest of 11 year old trend line

This week the EUR/USD's attempted rally faltered and turned lower at a retest of the trend line drawn from the 2001 and 2002 lows.

Zooming in to a daily chart of the past year, we see that the market closed the week below the 40 day moving average and is trending lower within a clear down trend channel.

Gold retested triangle trend line and closed the week above it

Gold retested the triangle trend line and closed the week above it, but remains within a broader down trend channel. The May low and June high are key.

Silver daily chart

Silver has broken the recent down trend line but remains within a broader down trend channel.