Morning Thoughts

Emerging Markets moving very nicely, in line with expectations. Wave iii is very likely over at current levels, will now give way to a narrow (about 1.5%) range into Tuesday/Wednesday of next week, where the base will be found for a move to about 815.


Overall though, I now think that strength in global markets will carry on through June (previously I thought that we will peak at the end of May and move lower through June). So now I think that a move lower will take place in July. 

Russia has based. I make out a little impulse higher from wave 4 base. So long as the low of this week holds, look for new highs for the cycle:

Nasdaq moving nicely higher, will now likely pause. April highs firmly in sight before strength subsides though:

Finally, EUR/USD I think will pause around current levels for a little longer (wave 4 will take longer):

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Global Equity Markets VERY Close to Peaking

Global Equity Indices have complied to a near perfect degree with our forecasts from the early June low. As expected US indices are within spitting distance of new post-Crisis recovery highs and Europeans are up by over 20%. This is all (rising markets) about to end, and most likely reverse hard.

Here on the hourly chart of the EuroSTOXX 50, just some finishing touches remain to be placed, with eventual tops likely around 2500 level.

Global Equity Markets, Risk Assets Close to Major Peaks

From the last update:

“In the next few days, look out for a slowdown in momentum on shorter-term charts and divergences on medium-term ones.”

This has come to pass – momentum slowed down through over a week of sideways, lateral action and began to diverge on four hourly charts. Signs of a major top are continuing to accumulate.

 

Here on a four hourly chart of the EuroSTOXX 50 the lateral consolidation took place just above the initial target for the whole correction at 2400. I expect the index to top within about 2% of current levels. It could go higher, but that is entirely unnecessary. Sustained trading below 2401 (RED line) increases confidence in a “top-in” view.

 

Going out further, in the longer-term, I expect global equities to fall far and for a long time, as shown here on a daily chart of the Dow Jones Industrial Average.

Global Equity Markets Close to Peaking

Equity markets across the world have been mired in what appears to be side-ways ranges (admittedly, fairly wide ranges) for over two months, since the early June 2012 lows.

 

I believe that corrections higher, that began in June 2012 are coming close to their end. In the next few days, look out for a slowdown in momentum on shorter-term charts and divergences on medium-term ones.

 

Here on the four hourly chart of the EuroSTOXX 50, I expect wave C to finish around 2400. This will likely complete the correction to the decline that started back in Spring of 2012. In the medium-term, this index is likely to drop over 20% from current levels.

 

This is a four-hourly chart of the Australian ASX200. The five-wave, impulsive decline from the May 2012 high is very clear. So far, so is the correction higher, where the last leg appears to be over – it will likely peak around 4270.

European Equity Markets Close to Bottoming

I believe European Equity Indices are close to putting in medium-term bottoms around current levels. Below is an hourly chart of the German DAX, which appears to be in the final stages of a “diagonal” move from mid-May highs of just under 6,600.00 (red “iv”). If correct, the bounce should at least carry us back to 6,600.00, with scope for 6,900.00 and beyond.  

 

This is an hourly chart of the EuroSTOXX 50, where a diagonal also appears to be ending. The correction higher should take us to at least 2300, about 8% above current levels, with a high probability of a move to 2,400.00 and 2,450.00.

Aidyn Kussainov

 

US, European Equity Markets At Or Very Close To Bottoms

We have what I have been looking for – a very clean impulse lower from the May highs, illustrated here on the IWM (US Small Caps ETF).

 

Any strength should be respected, and will likely carry far.

 

 

Aidyn Kussainov

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London, UK.

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