Lets have a break down of the analysis from monthly to one hourly time frame to have a clear understanding of the overbought structure and roaming around the highest highs on intraday charts. AUS200 , since March 2020 - has been creating highest highs without a prolonged bearish correction, rather breaking above 6935 i.e January 2020 high and settling its relative strength index at 70 on monthly charts. Exponential moving average 50 in monthly time frame is indicating that a strong bearish correction of higher degree is awaited but counting the waves in accordance to elliot wave pattern we are still in wave 3 and a final impulsive wave 5 is awaited. A smaller scale of correction to the previous resistance turned support might take place as a retest i.e 7150 forwarded by the final wave 5 - breaking the current highest high 7630. The weekly time frame shows that the 5 wave pattern mightve been completed and observing the overbought condition based on relative strength index - AUS200 might lick 6929 i.e exponential moving average 50 before moving any higher. 

BULLISH AND BEARISH CONDITIONS/ POSSIBILITIES :

In daily time frame AUS200 has already initiated bearish correction and is currently in wave b most probably, indicating that wave c might provide us a closing at 7221 i.e strong support and consolidation zone from June and July. A closing below the aforementioned level would lead AUS200 towards 7069 and 6920. Evidence the Australian economy was already rolling over post stimulus masking, before the latest lockdowns came into effect. This economy is in serious trouble long term, as well as with the immediate recession. The loss of momentum in stock gains is largely based in this growing, reality recognition that economies are faltering. Once Jackson Hole is out of the way, this awakening could really begin to bite.

AUS200

Aug 26 2021

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