Sunday, 21 September 2014

ASX 200 breaking down, beginning a 50%+ decline?

Daily chart shows the ASX 200 breaking down.

Monthly chart Elliott Wave count suggests the market is beginning a 50%+ decline, to below the 2009 low and likely quite some distance lower.

S&P 500 hits top of long term up trend channel AGAIN

Arithmetic scale weekly chart shows the S&P again hitting the top of the trend channel drawn from the 2011 low. I almost exclusively post log scale charts, but the S&P often shows clearer patterns on the arithmetic.

Dow testing trend channel resistance

Daily chart shows the Dow testing trend channel resistance. Given the weakness of Friday's candle, I expect to see further near term weakness.

Monthly chart shows a giant bearish megaphone pattern, suggesting that any near term weakness could lead to an extended decline. If the megaphone is the correct interpretation of market behaviour, it will result in a decline to below the 2009 low. But wait, aren't we seeing an upside break from the megaphone? Not in my view, as the internals of the market (volume and breadth) are weak, making it more likely that we are seeing a throw over / false break.

China H-Shares index breaking lower, beginning larger decline?

Daily chart shows the China H-Shares index breaking lower.

Weekly chart Elliott Wave count suggests the current break is just the beginning of a large decline.