Although it’s already come a long way, there is good reason to argue for materially lower levels. The wave count above suggests that a new 5-wave sequence started at the Feb. ‘13 high, within which the market is presently in its 3rd impulsive down leg.
From a pure techs perspective, the next important support stands another 8-9% below current levels at 89.83-88.85. This area includes the Aug. ‘12 and 76.4% of the Mar. ‘09/Feb. ‘11 rally.
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
