The opening salvo

Well, it looks like one of my counts turned out to be correct, and with a violation of the recent range base we began a decline. I am slightly concerned by the very start of this decline, which was not impulsive. However, at this stage I favour further probing of the lows, perhaps marginal new lows beyond those of Monday. What follows afterwards will be telling. I am leaning towards another meak bounce (like today) and then acceleration to the downside. However, I can also see how the market would attempts another run at the highs (but this is highly unlikely).

In short, get ready to short.

Below is an hourly chart of the French CAC40. I favour a 1.5-2% decline followed by a consolidation. The count from the low remains unchanged from the one proposed on Thursday 13 August. Added is a count from the high.

Below is an hourly chart of the Japanese TOPIX. The count is slightly updated to accommodate the "diagonal" fifth wave within the bigger structure. Provided the highs hold, more downside is ahead.

Below is a daily chart of the Australian versus the American dollar. Along with most other currencies, I expect the AUD to fall relative to the USD. AUD will likely be one of the worst performers.

This is an hourly chart of the AUD/USD. I believe that AUD is in the early stages of a multi-month bear trend that will take it to or even below Autumn 2008 levels.