Wednesday, 29 October 2014

ASX 200 despite the recent rally, no reason yet to doubt that a big decline has begun

Daily chart shows the ASX 200 testing the Fibo 61.8% retracement of the recent decline. So, a decent rally, but well within the expectations for an upwards correction, if the larger degree trend is now down, as I believe it could be.

Monthly chart shows that the recent trend line break is intact, and there is as yet no reason to question the strongly bearish outlook presented by the illustrated Elliott wave count.

S&P 500 testing confluence of resistance

S&P 500 daily chart resistance is shown in the first chart. Potential resistance. There is no such thing as resistance in a bull market. So, if we're still in a bull market, the S&P will power on through. On the other hand, failure to meaningfully breach the illustrated levels and hit new record highs would keep alive the prospect that the market is in the early stages of a 60%+ decline. Guess we'll find out soon.

Weekly chart shows that the market is also testing the underside of the trend line drawn from lows in 2011, 2012 and 2014. Will the market power to new highs, or turn lower to re-test the line drawn from the 2009 and 2011 lows?

Hang Seng trading in an upwards corrective trend channel (flag), setting up for another move lower

Daily chart shows the Hang Seng trading in a short term upwards corrective trend channel, running parallel to the channel from earlier in the year. Call it a flag if you prefer. The implication is that the market is setting up for another move lower.

Weekly chart next, illustrates my big picture Elliott wave count, suggesting that "lower" could be an understatement.