Monday, 16 October 2017

ASX: is this the final top?

Hi Traders,

The futures of the ASX 200, the SPI 200 (now at 5828) might have staged the last rally. If this is the much expected top (note the exhaustion gap in 4-hours chart ), it
 should be soon followed by a sharp correction to the major support at 5320-28.


The daily and 4-hour charts show a huge round formation started on May 1st, 2017. This kind of pattern is usually time-symmetrical. 
Check the magenta lines and the vertical lines on the daily chart

Placing the centre of the round formation at the lowest low at 5592, we have 60 days from the centre to the highest top on the left, and 60 days from the centre to the highest top on the right.

After the same number of days have passed, a new trend usually starts.

On a much bigger scale, the monthly chart reveals that the SPI 200 performed a huge a-b-c retracement from the low in March 2000.

The weekly chart also shows an a-b-c retracement up.

Moreover, it reveals that the present downtrend actually started around mid-March, 2015 at 6010 and made the lowest low at 4643 on Feb 2016 (wave-1). 

This, in turn, was followed by an a-b-c retracement rally to 5944 on April 30, 2017 (wave-2).

The latter was the very last top of the SPI 200 and it marked the completion of retracement wave-2
Note that the gap between 6020 and 6102 has never been filled so far.  

Monthly chart, click to enlarge

Weekly chart, click to enlarge

Daily chart, click to enlarge

4-hour chart, click to enlarge

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