NZX50 bearish indications *update*
Updated
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The price decline of 2015 to 2016 can be plausibly labelled either a WXY (double ABC) correction or as a single impulse wave down. There seem not to be any failures within what is quite likely an impulse wave down. So that leaves two main scenarios on the table:
1. That we have had the wave (4) correction and are working on wave 5 (we are nearing the end of sub-wave 3 of wave (5)), or
2. That we are in the later stages of wave B up - with wave (C) (down) still to come. This scenario points to a deeper correction.
That aside, Whether we are in wave B or wave 5 currently, immediate indications are short-term bearish.
- There are three peaks on the RSI showing a declining trend while price makes higher highs. This would indicate a larger or smaller correction is inbound. Bearish divergence is a strong indication of lagging momentum. If we are in wave B, then 146 should act as support. If we are about to start wave C then $131 should act as support for wave (5).
- The wave count seems to points towards a corrective phase.
- Equity markets in the U.S. and Europe have experienced increasing volatility over the past year and have both seen significant drops in the last few days. This will increase market uncertainty.
This is published solely for my own education and as an interested observer - who doesn't have a position in the market.
The price decline of 2015 to 2016 can be plausibly labelled either a WXY (double ABC) correction or as a single impulse wave down. There seem not to be any failures within what is quite likely an impulse wave down. So that leaves two main scenarios on the table:
1. That we have had the wave (4) correction and are working on wave 5 (we are nearing the end of sub-wave 3 of wave (5)), or
2. That we are in the later stages of wave B up - with wave (C) (down) still to come. This scenario points to a deeper correction.
That aside, Whether we are in wave B or wave 5 currently, immediate indications are short-term bearish.
- There are three peaks on the RSI showing a declining trend while price makes higher highs. This would indicate a larger or smaller correction is inbound. Bearish divergence is a strong indication of lagging momentum. If we are in wave B, then 146 should act as support. If we are about to start wave C then $131 should act as support for wave (5).
- The wave count seems to points towards a corrective phase.
- Equity markets in the U.S. and Europe have experienced increasing volatility over the past year and have both seen significant drops in the last few days. This will increase market uncertainty.
This is published solely for my own education and as an interested observer - who doesn't have a position in the market.
Note
What do I get for being right? nothing
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