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ASX SINKS TO TWO-MONTH LOW

Click on the link for the full article, nothing more to say really, the AUS Index is doing exactly what has been presented in our members area.

We are waiting for the Primary cycle to show us it is turning up but as per previous post the AUS Index is being held down by the US, European and Asian markets.

Please click the link below to download this document explaining a basic outline of the cyclic nature of the markets.

Microsoft PowerPoint:

CYCLES POWERPOINT

Google Slides (Copy and Paste this URL into another tab):

https://docs.google.com/presentation/d/1Z4fm1BdrkAp6-vhkZ7GbTgn395g-EoxC/edit?usp=sharing&ouid=104140507138210023857&rtpof=true&sd=true

Make sure to click the “Slideshow” button once you have clicked on the PowerPoint/Google Slide

Short-term Primary Cycle:

The Primary Cycle is in its accumulation phase as confirmed by last weeks strong move up. We did mention that this rally was likely short-lived, and that was true to say the least.
Price has retraced all the way back and is testing that lower valid trend line, and pull back up at the close.

Long-term Major Cycle:

The major cycle is most likely still in the distribution phase. Nothing has changed here as we are still waiting for the all important cross of the lower valid trendline to signal this cycle has tipped over into mark-down. Fridays bar tested this line for the third time, adding to it’s significance.. Price is unlikely to make new highs for the remainder of 2023 once the lower trundling is broken to the downside. Interestingly the German index retested it’s all time high but then dropped just below its corresponding lower trend line.

Short Term Primary Cycle

Fridays strong move up and the break of the upper valid trend line likely suggests the primary cycle has completed a low and has turned up entering the accumulation (beginning) phase of the cycle.

Long Term Major Cycle

This new information does not change the analysis of the Major cycle in our previous post. The Major Cycle is within it’s distribution phase and is topping-out. As the Major Cycle progresses into the Mark-down phase this will oppose the upward momentum of the primary cycle so, again any upward movement in this current primary cycle is likely to be moderate. We continue to watch the lower trend line which can now be adjusted given the recent low of the primary cycle.

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SHORT TERM PRIMARY CYCLE

Price is currently coming to the end of a primary cycle.

In the diagram price action is currently forming a classic flag pattern.

It is likely that the primary cycle is now turning UP, although this is not confirmed. If price breaks the green (Upper) trend line, this will confirm the beginning of a new primary cycle. Although any rally is likely to be short-lived given that the AUD Index is now approximately halfway through a Major Cycle, see below:

LONG TERM MAJOR CYCLE

Should price break through the red (Lower) trend line this will indicate a pivot point in the longer (Major) cycle turning down. It would be unlikely that price would exceed the recent high (Point A on the chart). The AUD Index has tested this resistance level three times in the last 12 months. If the lower trend line is breached, this would suggest that the AUD Index would be predominantly down for the remainder of 2023.