Wednesday 3 March 2010

Correction Higher In Risk: Completing The Correction

The markets have moved in an orderly and expected fashion, where "thrusts higher" materialised from "lower bases". The strong to very strong rallies I expected last week are likely in their final stages. Their highs around the end of this and beginning of next week will set us up for mighty declines.

Below is an hourly chart of the German DAX. Since the highs in January, this index (along with most others) behaved in a very technical manner, and this morning reached the long-standing target (since 9 February) of 5800. If my outlook is correct, this rally should end in the next few days.

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