Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Nvidia Numero Uno in Count Down to President Donald Pump Election Victory - 5th Nov 24
Trump or Harris - Who Wins US Presidential Election 2024 Forecast Prediction - 5th Nov 24
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24
US House Prices Trend Forecast 2024 to 2026 - 11th Oct 24
US Housing Market Analysis - Immigration Drives House Prices Higher - 30th Sep 24
Stock Market October Correction - 30th Sep 24
The Folly of Tariffs and Trade Wars - 30th Sep 24
Gold: 5 principles to help you stay ahead of price turns - 30th Sep 24
The Everything Rally will Spark multi year Bull Market - 30th Sep 24
US FIXED MORTGAGES LIMITING SUPPLY - 23rd Sep 24
US Housing Market Free Equity - 23rd Sep 24
US Rate Cut FOMO In Stock Market Correction Window - 22nd Sep 24
US State Demographics - 22nd Sep 24
Gold and Silver Shine as the Fed Cuts Rates: What’s Next? - 22nd Sep 24
Stock Market Sentiment Speaks:Nothing Can Topple This Market - 22nd Sep 24
US Population Growth Rate - 17th Sep 24
Are Stocks Overheating? - 17th Sep 24
Sentiment Speaks: Silver Is At A Major Turning Point - 17th Sep 24
If The Stock Market Turn Quickly, How Bad Can Things Get? - 17th Sep 24
IMMIGRATION DRIVES HOUSE PRICES HIGHER - 12th Sep 24
Global Debt Bubble - 12th Sep 24
Gold’s Outlook CPI Data - 12th Sep 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

ASX200 Aussie Stock Market's Final Fling

Stock-Markets / Stock Markets 2015 Feb 04, 2015 - 02:54 PM GMT

By: Austin_Galt

Stock-Markets

It seems like only yesterday I was writing about the Aussie stock market, the ASX200. Oh, hang on, it was. Well, only a few days ago. Since then price has exploded to new rally highs. While I was confident of this happening I wasn't expecting it now.

Price has launched higher parabolic style in part due to the Reserve Bank of Australia cutting the cash rate by 0.25%. But fundamentals are used as excuses and I don't make excuses. I was wrong in thinking price wouldn't make new rally highs now.


So let's quickly update this explosive situation using the daily and monthly charts.

ASX200 Daily Chart

We can see the move up from recent low is certainly of the parabolic variety. Parabolic moves higher are often seen at the end of bull trends.

Just as I was previously confident of new rally highs being made, so too am I reasonably confident of the final rally high level. As mentioned in previous analysis, I am looking for a rally high around 5959 which stems from the 76.4% Fibonacci retracement level of the move down from 2007 top to 2009 low. I think price is now spiking up to this level.

The Bollinger Bands show price clinging to the upper band. This is where I went wrong in the previous analysis in thinking price was starting to move away from the upper band. This was put paid to immediately with a strong move up to recapture the upper band.

If the Relative Strength Indicator was overbought a few days ago it is even more so now. This looks like a big outlier reading coming up.

The Moving Average Convergence Divergence (MACD) is also going up hard.

Both these lower indicators look like they are having one last lash. The final fling!

ASX200 Monthly Chart

I have added the Fibonacci retracement levels which show my long term target for rally high being the 76.4% level at 5959.

I have added Bollinger Bands and in previous analysis I stated I wanted to see the final rally high do a little "up and over" of the upper band. This looks to be in play with price looking to trade well above the upper band.

I have drawn an Andrew's Pitchfork in which I also stated I wanted to see price to an "up and over" of the upper pitchfork trend line. Price is already doing this now.

The RSI shows this coming price high looks set to be accompanied by a quadruple bearish divergence. Normally a triple is sufficient while a quadruple just hammers the point home!

Now I remain very bearish for the month of February and so once the spike high is in place over the coming days, if I am reading this correctly of course, then I expect a big reversal and fast paced move down to finish the month well in the red.

I have drawn Voodoo style how I am currently expecting the February candle to look. It shows a long wick up to put in the high around 5959 before reversing back down and closing the month on its lows.

I have added a Parabolic Stop and Reverse (PSAR) indicator which shows the dots on the downside which act as support. I expect the February low to be just above that support which is at 5149. If this plays out as expected then I would think a small rally then takes place at the start of March before price turns back down and smashes through this support.

So it looks like this final fling in the Aussie stock market is about to turn ugly.

By Austin Galt

www.thevoodooanalyst.com 

Austin Galt is The Voodoo Analyst. I have studied charts for over 20 years and am currently a private trader. Several years ago I worked as a licensed advisor with a well known Australian stock broker. While there was an abundance of fundamental analysts, there seemed to be a dearth of technical analysts. My aim here is to provide my view of technical analysis that is both intriguing and misunderstood by many. I like to refer to it as the black magic of stock market analysis.

My website is www.thevoodooanalyst.com 

© 2015 Copyright  The Voodoo Analyst - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in