Australia Ordinaries - wave 2 is done

Wave 2 of wave [C] down is done and we should see wave 3, which should reach at least 3,784, but more likely continue all the way down to 3,252. Ultimately wave [C] should take us below the 2009 low at 3,090.80.

AORD - wave ii correction in progress

Wave [B] corrected 50% of the decline of wave [A] and my preferred wave count is shown on the chart above. I see the decline form 5,048.60 to 4,450.20 as wave i and we are currently in a wave ii correction, which ideally will take us to the 4,751 - 4,823 area, before wave iii down will take over, breaking below 4,450.20 for a move down to at least 4,251.59, but more likely below the 4,000 mark for a decline closer to 3,881 area.

One could easily argue, that a expanding triangle is building, but looking at the Shanghai Composit and the the other major indices I don't find that count very trustworthy at this point and it will only come into play if we see a deceive break above the 4,823 area.

Australia Ordinaries - Is wave iv of 5 building?

Ideally wave iv of 5 is currently bulding after wave iii peaked at 5,048.60 calling for one more rally above 5,048.60, when wave iv is done near the 4,883 area. As wave ii was a simple Zig-zag wave iv should be a flat or a triangle.

This down move should not break below 4,733.10 at any time. A break below 4,733.10 would change the count in favor of a finished wave 5 of [B] at 5,048.60 calling for a much bigger decline.

Australia Ordinaries - The uptrend continues

The uptrend continues to push ahead making new highs. At this point we are just below the 50% retracemnet target at 5.036,16, which should be tested soon.

Suport is found at 4,954, but only a break below suport at 4,845 will confirm that the top is finally in place for a decline to at least the 4,483 area. Longer term the decline should be much deeper.

Australia ORD - Continues to push higher

The AORD continues to push higher and with the break above 4,904 does clear the way for a continuation high towards the January 11. high at 4,983. That said the AORD is very overbought at the moment.

Only a break below 4,848 will indicate that a top is in place for a decline to at least the 4,734.91 area.

Australia Ordinaries - Wave 2 is done

Wave 2 need one more rally to 4,892.20, which was within the ideal target area from 4,885 - 4,893. Wave 2 ended just above the 78.6% correction high of major wave 1 down. A break below 4,794.10 will confirm that wave 2 peaked at 4,892.20 a accelerate major wave 3 down to next support at 4612 and the bottom of major wave 1 at 4,483.30.

As wave 2 became a simple Zig-zag. We already know, that major wave 4 will be some kinde of flat or a triangle due to the Priciple of Alternation.

Be ready for major wave 3 down, as this is a very/the most powerfull of the waves.

Australia Ordinaries - Is wave 2 done or do we need one last rally higher?

Is the wave 2 rally done or do we need one more rally closer to the 4,883 - 4,885 area before wave 2 is finally done?

One could make a case of the final wave 5 of C being a Ending Diagonal, but if this is the case, then the E-legg became a truncated top (lower top than the C-legg), this is a very early call for that. Therefore I do favor one more rally higher towards the 4,883 - 4,885 area to marke the final high a the finish of wave c of 2.

Only a direct break below 4,731 will confirm that wave C finished at 4,849.20.

No matter which count is correct I would not fight hard to squeeze the last percent out of this market. I would just sell out here and even concider selling short at this time.

Australia Ordinaries - Wave 2 of wave [C] has hit its target-area

The target-area for wave 2 that I laid out last week, has now been tested. It could still move a little higher closer to 4,861 - 4,893 area before topping out.

A break below 4,765 would be the first serious indicator, that the top is in place.

Australia Ordinaries - In the early stages of wave [C] down

After wave [B] ended with the peak at 4,983.40 we have seen wave 1 down to 4,483.30 and are currently stracing out wave 2. I do think we will see wave reach the ideal target-area streching from 4,790 to 4,893. The is a couple of gaps in wave 1, that we migth need to fill, but it's not necessary, before wave 2 is finally in place.

Failuer to overcome resistance at 4,706 and a break below 4,612 would argue that wave 2 is already done, but that is not my favored picture.

Australia Ordinaries - In the early stages of wave [C] down

I have shown my prefered count of the Australia Ordinaries.

As can be seen wave [B] ended after a perfect 50% retracement of the prior wave [A] and the following decline was a beuatiful five wave decline telling us, that wave [C] has begun. We are only in the very early stages of wave [C] down, which ultimately should break below the bottom of wave [A].



Closing in on the bigger picture we can see a clear five wave decline from 4,983 ending wave 1 at 4,483 (a nice 500 points drop). Wave 2 is currently ongoing. I would expect wave 2 to peak near the 61.8% retracement of wave 1, which would make it peak near 4,792 (also finishing the right shoulder in a nice looking Shoulder/Head/Shoulder top).

Take care when wave 2 peaks as the wave 3 decline will be much more powerfull.