Wednesday, 10 February 2016

ASX 200 daily chart shows bullish false downside break at two key supports

Today's new low by the ASX 200 surprised me. Markets often do. The rally back above the (all sessions) August and January lows has set up a bullish false downside break at two key trend line supports. This is occurring at the same time that other indexes around the globe appear to be completing the corrections from their 2015 peaks, as illustrated in posts yesterday.

The admittedly tortured wave count that I published yesterday was blown away by today's action. Dario Mofardin shared a feasible wave count for an impulsive decline with me today on Twitter. It may in time prove to be the best description of what is unfolding, but there are alternatives that count the decline as a correction. I don't favour any count at this time. At some point the picture will become clear, it always does.