Friday, 26 September 2014

ASX 200 taking first baby steps in a 50%+ decline toward 2500

Monthly chart of the ASX 200 including overnight trade is shown below. The Elliott Wave count and corrective trend channel from the 2007 peak illustrate my preferred count for a decline toward 2500 over the next year or so.

Fundamental factors are supportive of such a decline. To list but a few of those factors: the Mining investment boom is finished, commodity prices are crashing, Australia is leveraged to one of the biggest credit bubbles in history (China), the Chinese property bubble is unwinding, Europe is deflating, Australian manufacturing is dying, banks make up 30% of the ASX 200's market cap and are absurdly leveraged to the bubble in Australian house prices....