• 741 days Will The ECB Continue To Hike Rates?
  • 742 days Forbes: Aramco Remains Largest Company In The Middle East
  • 743 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 1,143 days Could Crypto Overtake Traditional Investment?
  • 1,148 days Americans Still Quitting Jobs At Record Pace
  • 1,150 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 1,153 days Is The Dollar Too Strong?
  • 1,153 days Big Tech Disappoints Investors on Earnings Calls
  • 1,154 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 1,156 days China Is Quietly Trying To Distance Itself From Russia
  • 1,156 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 1,160 days Crypto Investors Won Big In 2021
  • 1,160 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 1,161 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 1,163 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 1,164 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 1,167 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 1,168 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 1,168 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 1,170 days Are NFTs About To Take Over Gaming?
The Problem With Modern Monetary Theory

The Problem With Modern Monetary Theory

Modern monetary theory has been…

Zombie Foreclosures On The Rise In The U.S.

Zombie Foreclosures On The Rise In The U.S.

During the quarter there were…

Billionaires Are Pushing Art To New Limits

Billionaires Are Pushing Art To New Limits

Welcome to Art Basel: The…

Trading On The Mark

Trading On The Mark

Trading On The Mark

Our work is grounded in several technical methods. We make use of Elliott Wave, Gann techniques, Fibonacci relationships in price and time, cycles, and other…

Contact Author

  1. Home
  2. Markets
  3. Other

Australian Stocks Due For Downward Move

After having looked at the Australian Dollar recently, it makes sense to consider the Australian stock market as well. The S&P/ASX 200 (INDEXASX:XJO) is comprised of the top 200 shares in the Australian Securities Exchange. Thus, it is more narrow than the often-quoted All Ordinaries index.

On the monthly timeframe, two cycles can be extracted from price data, with lengths of 80 weeks and 40 weeks. This spring, both of those cycles are poised to begin a downward phase. Based on cycles alone, we would expect weakness to extend into 2016 or 2017. The shaded areas on the monthly chart below shows previous times when both cycles have converged in their downward phases.

Besides the presence of a cyclical high, price also is retracing into a target range of 5,422 to 5,670, based on Fibonacci retracement values of the big decline from 2007 to 2009, and also based on a 1x1 extension measurement up off the 2009 low.

Australian ASX 200 - Monthly Chart

At the very least, traders with long positions should consider taking profits. A shorting opportunity may be forming here, but the relevant entry signals depend on the individual trader's approach and risk tolerance. Aggressive traders might make an offer near one of the resistance levels shown. More conservative swing traders would wait for a lower high to form on the weekly timeframe, and they would use the prior high as a guide for setting stops.

 


This article originally appeared at Trading On The Mark.

 

Back to homepage

Leave a comment

Leave a comment