ASX 200 End of Financial Year: Adjustment after BREXIT

Due to BREXIT news our market (i.e. ASX 200 index) made the fifth wave down to 5051 level so I was wondering where it goes from here.

A five wave structure could lead to a low but also there is support at this level –  50% pull back of the range 4706 (Feb low) to 5424 (May high).

With so many unknowns and uncertainties on a global scale it’s hard to believe we have a low. As we know, the markets don’t like uncertainty and this is usually a good enough reason to sell-off.

On the other side, the market needs to adjust after the fifths leg down and in particular given the abrupt fall which had put the index in oversold territory.

On the chart below I’ve indicated the five waves, the Fibs retrenchments from the high (5424) and recent low (5051), and the trend line (blue line) that has been broken. In order to keep this down move intact, the index shouldn’t break the upwards trend line.


In conclusion: if the market  goes up tomorrow 30th June (not to forget that this is the last day of the financial year in Australia) it could reach the trend line at 5192 that is in the proximity of 38% retrenchment level of this move down.

After this, the trend line value will increase by approx. 4-5 points every day. Next point of resistance is he level of 72 MA (see brown line on the chart) at 5215 and 50% of the Fibonacci level at 5239.