Here is a weekly chart of the ASX200. The last week has a definite down bias and we are still stuck in a small range and before any trading can resume we would need to see a break upwards or downwards. On the downward side, the next support would be around 4200. This represents the market giving back around 60% of the gains from March 2003 and the peak in October last year. This 60% figure tends to be the most that a bear market will claw back from the previous bull. For an interesting study on the history of the size and extents of bull and bear markets, I could not recommend the Trader Vic books enough. The author of these books studied the Dow Jones index for over 150 years and found some very definite patterns at the macro level when studying the index.
Other interpretations of the current pattern is to interpret it as a Bear Flag which puts extra emphasis on the next major move being down. Note that the range is contained within the 38% and 50% fib levels.
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