Those of you, who have checked our Education section, have probably seen the article about ending diagonals. It says, that this is a reversal pattern, occurring in the position of wave 5 or wave C. Elliott wrote, that ending diagonals are often followed by a “swift and sharp reversal”. Having all that in mind, take a look at the daily chart of the Australian ASX 200.
Ending diagonal is exactly what the chart appears to be showing. As you can see, it is forming as wave (5) of C. That is why expect a decline in the ASX 200 soon. We are not going to show you where this daily price action fits into the bigger picture, because we already did that on April 17th 2014. If you want to see it for yourself, you will have to check out the recommended material below.
There you will see, that this diagonal deserves much attention, because this may be the last time the ASX 200 is trading around 5600 for the next maybe 5 years or more.