Count keeping

Equity markets are likely in fourth wave consolidations. At this stage, targets for the fifth wave, for most equity indices, are located around the lows of mid-August. Following a decline today/tomorrow, I expect a meaningful bounce of about 2-3% that lasts for 2-3 days. It will likely coincide with the employment report.

Elsewhere, the US dollar is bottoming against a wide array of emerging markets currencies, and commodities are topping. In the G7 space, I no longer think that bonds are poised for immediate upside. I would prefer to see them lower first. This might happen on Friday.

Below is an hourly chart of the DAX. I expect a decline of about 120 points soon. Folowing that, I expect a meaningful bounce.