The Australian stock market has continued to fall to new lows and in doing so it is now a 5 wave decline. In other words it joins other world markets into a bear market. What should first follow however is a retracement of this decline in 3 waves. Then it may start the next major sell off.

US indices are in wave c of 2, and that has to break up into 5 waves. So wave ii done last night. That said c of 2 can go to the upper end of the channel for wave 2 at 2840. The 20 dma at 2721 is now a short term support as we closed above it.

US stocks rebounded as expected, however I focus on the Transports index today. Reason being that the Dow Transports did not fall as much as the other US indices, holding its 61.8% mark in wave B. Now we are above the high of wave A heading to the upper end of the channel.

Indiacharts has been forecasting the markets freely from this blog since 2001. In June 2013 we launched the Insiders Program so that you can ride the markets up and downs as it happens everyday.