Wednesday, 1 October 2014

If the ASX 200 has begun a 50% decline then it must remain below 5500, ideally below 5430

Last week I presented a monthly chart suggesting that the ASX 200 has begun a 50% decline toward 2500.

How must the market behave if the above scenario is to remain on the cards? Ideally the market must stay below the 40 week moving average, currently around 5430. In the early stages of the new trend, for the next few weeks, I would give the market a little more wriggle room, up to the 18 week moving average, currently around 5500.


Dow futures showing clear down trend channel, yesterday's high is key

Dow futures hourly chart shows a clear down trend channel, illustrated below. I covered the big picture for US stocks most recently last week, showing long term charts of both the Dow and the S&P 500. Those long term charts beg the question, could this hourly chart down trend be the first baby steps in a decline to below the 2009 low for US stocks? A 60%+ decline?