Tuesday, 9 June 2015

ASX 200 breaks lower from up trend channel, is rally from the 2009 low complete?

Weekly chart shows the ASX 200 breaking lower from an Elliott Wave trend channel, following a complete 5 waves up from the 2011 low.

Monthly chart next, zooms out to illustrate that the 5 wave rally from the 2011 low is best described as wave c of B. The entire bear market rally from the 2009 low could now be complete, with big wave C lower just beginning. If you know EW, you'll know that wave C should be stronger than wave A, and therefore will likely carry lower than I have shown.

How will we know that the bearish scenario described above is actually playing out? Simply, the market must continue to decline strongly. Back to another weekly chart now to illustrate a simple measure of trend. If the market stays below the illustrated 40 week moving average, as it did in the early stages of the 2007 to 2009 decline, then I'll stick with the bearish scenario. The 40 week MA is currently at 5586. Let's see.

S&P 500 daily chart testing trend line support

NASDAQ 100 daily chart testing trend line support

EURO STOXX 50 probing key long term support, below 3400 area big top would be in

Silver rallying from trend line support? Over 16.21 would add confidence