Our bearish scenario of a complex correction in the US , has helped european indices gain more time to complete their correcton waves. European indices needed also more time for the correction to complete, but also needed an upward push so that the necessary price levels were reached. US markets corrected nearly 61,8% but the european ones only 38%. The european summit last week gave the markets something to be happy about and most european indices rallied towards wave 2 retracement targets.
DAX has almost reached the 61,8% retracement, whereas CAC has touched the 50% retracement. As second waves, both in time and price levels, these waves are considered completed or soon to be completed. The form of the upward movement, in both indices shown in the charts, is not clearly impulsive. The bearish scenario that applies to S&P too, has synchronised both US and European markets. So should we expect a decline of a 3rd wave proportion? If our wave counts are correct, then a 3rd wave down will follow. Breaking June lows would confirm this wave count. Breaking last weeks lows will only increase the chances of the impeding decline.
Summarising we are close or at the end of wave 2. Wave 3 down will be strong. If this wave count is not correct, we will not break June lows.
Thank you for taking the time to read my post.
corrected my fib retracements in the first chart as a follower mentioned.
ReplyDeleteThank you chartrambler for bringing this to my notice.
Today DAX almost touched 61,8%.