Thursday, 10 September 2015

ASX 200 pushing below trend line drawn from 2009 low, toward 2500 over next 12 months

Monthly chart for all sessions trade of the ASX 200. Log scale, which I favour over arithmetic for this market as it allows neater trend channels to be drawn. Charting is an art. There is no universal right or wrong. Whatever works for the individual. You pays your money (and you takes your chances). Wave C and the target of 2500 both no doubt look outrageous to most, but the structure looks clear to me as the most likely for the coming year. I'll change my mind if the market provides evidence that I should. Let's see.

S&P 500 down trend & wave structure suggest imminent decline to below August's low

I'll start with a couple of cash market S&P 500 charts that I tweeted earlier today. Worth recording them on the blog.

First chart shows that the market has established a clear zone of resistance between 1988 and 2044 or so, turning down from the lower end of that zone on Wednesday. Favour immediate further downside while the market remains below the lower end of the resistance zone.

Second chart illustrates the daily chart wave count and my expectation that wave five to fresh lows has begun. An expectation based upon the current down trend and bearish wave structure at every degree of trend. I'm keeping my eyes peeled for any bullish indications that the market may present, but I don't see any at this time

Hourly chart of all sessions trade shows the clear Elliott Wave structure, which favours further immediate decline. In European trade the market is nearing a test of key trend line supports. Below 1940 initially would boost the near term bearish case, and below 1920 even more. Let's see. 

Gold (still) showing bullish wave structure on move from weekly chart trend channel support

Weekly chart shows that in late July Gold began a rally from trend channel support. Previous rallies from the nearby trend line have been good for 200, give or take. Why expect anything different this time?

4 hour chart shows the wave structure since the rally began from weekly chart trend channel support. Even Blind Freddy could only see this as five waves up then three waves down, a bullish structure, though equally clearly the immediate trend is down. Right now with the structure bullish but the near term trend down I'm neutral, awaiting a move through either trend line support or resistance to dictate my stance. A move above resistance at the down trend line at 1120 would indicate that the A-B-C correction was finished and a new five waves up is beginning. Downside risk levels are also clear.

AUD/USD daily chart testing key parallel trend line resistance

If (if) five waves down is complete, the AUD/USD should rally a meaningful distance, either to correct the decline with a move targeting the prior wave 4 peak, or to start a new larger degree rally. Let's see. Weekly and monthly chart trend lines sit nearby overhead as potential resistance (illustrated in my weekend post).