Friday 22 September 2017


Hi Traders,

The SPI 200 (now at 5660) seems to be close to the end of the line and the rats are leaving the sinking boat.

Although a small rebound to 5700-5730 is still possible, the SPI 200 is singing the swan song which could be followed by a deep dive to the major support at 5320-28.


The daily and 4-hour charts show a huge round formation started on May 1st, 2017. This pattern is usually quite time-symmetrical.

Given that the centre of the round formation is the lowest low at 5592, we have 36 days from the centre to the high on the left, and 37 days from the centre to the high on the right. See the vertical lines. After the same number of days have passed, a new trend should start.

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. It reveals that the present downtrend actually started around mid-March, 2015
 at 6010. In fact, the low at 4643 on Feb 2016 was followed by a retracement rally to 5944 on April 30, 2017.

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.  

Finally, the faith of the SPI 200 is quite correlated to a possible downtrend of the AUDUSD. The drop of the ASX might be significantly mitigated if Australian Dollar is driven below the 0.70 level by the action of the markets or by the Central Banks (FED or RBA). Conversely, the SPI 200 would sink vertically.

Monthly chart, click to enlarge

Weekly chart, click to enlarge

Daily chart, click to enlarge

4-hour chart, click to enlarge