Originally posted at 8:30 am PST.
AUDUSD is turning down now, finally breaking out of an upward channel which suggest that corrective fourth wave can be finished at 0.7444 and that market is headed south for 0.7300 once again. For now invalidation level remains at 0.7511.
Do you remember VIX index from a start of November, when we said that market may turn down after a three wave recovery into a trendline resistance? Well, price is now 50% lower while stocks are at new highs. But it's important to understand that this current cycle is slowly coming to an end. In other words, VIX could form a bottom in the next few months which means that stocks could turn down. And if we add the following NASDAQ chart with an ending diagonal, then we definitely should be aware of a limited upside and maybe even very strong turning point in 2017.