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It has been yet another difficult week for the Australian market with the ASX 200 continuing to distance itself from its offshore peers. US equities continue to outperform after a strong earnings season and a flailing currency. It remains very clear that the strength in the Australian dollar continues to dampen the performance of the ASX200 and our struggling export sector. We did see a completed wave 5 and the subsequent 3 wave correction appears to be playing out nicely, albeit a little further to go.
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The charts point toward an attempted Elliott Wave 4 buy for the ASX200, yet what really holds the market back is a lack of distinct fundamentals to guide this market higher. Sentiment is weak at best, debt issues continue to surface out of Europe and US markets appear ready for a pullback as the Dow completed its brief flirtation with the 12800 mark.
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This market will likely go higher. We can also expect to test highs above 5000 in the not too distant future, but for this to happen, the ASX 200 needs to break from its recent AUD strength and return to correlation with its US peers. This sheep has left the flock, but it’s only a matter of time before we see it return to where it should be.
Stay Ahead Of The Game,
Lachlan McPherson |