Morning Report Thursday 1st October 2015
Over the last few days we have focused very closely on markets repeating themselves in both time and price. The ASX200 perfectly fitted a repeating pattern of the overall corrective move when it broke out of its recent corrective trading range after exactly 25 days - see chart 1.
Very importantly will the US also repeat? If so, then the fun and games have not finished and more volatility is just around the corner. The last correction in the S&P500 of over 200 points was in 2011 and to date the market has repeated almost an almost exact copy of that correction with the acceleration move also occurring in August - see chart 2.
If history repeats the US market should spike down in October to around 1840 (4-5% below this morning's close) before enjoying an explosive rally of well over 10% - see chart 2.
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