Mick,
You are right in that when the excursion from the mean is over-extended like this it doesn't take much to prick the bubble, for a reason you might take your pick. Except for a couple of minor glitches we have 26 weeks of aggresssively accelerating price action and in the end it was a matter of when and not if it started the snap back.
Whether it goes on to a full blown correection at or past the -10% level remains to be seen, the futures suggest more of the same but it could bounce too. As usual the Oz market is over reacting, the same market conditions don't exist here as in the US but the trigger is now there for the local heavies to go short and drag the jittery along in the wake.
Re the time frame - on weeklies it is not unusual to see some sort of pullback around the 7 or 8 week timeframe. This time the attempted pullbacks fizzled probably because of the Trump factor and what Alan Greenspan at one time called 'irrational exuberance'.
Re the pre-emptive knowledge thing, it is always next to impossible to gauge. Often excursions from curve fitted or standard moving averages do help to highlight pending change. The US market analysts tend to rely more heavily on the standard 20/50/200 day simple moving averages for the short/medium/long term benchmarks respectively as well as support/resistance. I have found over time that the standard MA's are not so important in the scheme of things here in Oz. I think the lack of volume in our much smaller market tends to make the use of these tools less statistically significant.
Anyway here is the updated US SPX weekly from the close this morning including the trend line and 40 week MA. Interestingly the low hit the trend line right on the button. Looks as though it might be history after tonight.
Weekly SPX COB February 5th (US time)
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