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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

1/60A Portland Place, W1B 1NN

London, UK.

+44 (0) 7917 274 989

 

Market Update - European Stock indices, VIDEO LINK

http://www.youtube.com/watch?v=pZsEp7nStvk

 

Aidyn Kussainov

1/60A Portland Place, W1B 1NN

London, UK.

+44 (0) 7917 274 989

 

TECH BRIEF - LONDON (EUROSTOXX 50)

An update on the EuroSTOXX 50.

 

This index has been particularly badly hit, falling 14% in four weeks. It has been dragged down by the Spanish, Italian and French components, and supported by the German ones.

 

There are some tentative signs of a base emerging. The structure, from the 2550 March 2012 high could be finishing its impulsive drop. At the same time, we could still only be finishing the wave III drop. In either case, a rally of at least 5% is soon to be expected.

 

This will most likely coincide with strength in US indices, a reversal lower in TY and possible new highs in Crude Oil (above $110).

 

TECH BRIEF

EUR/USD:

 

Consolidation/correction phase in force. Likely to see overlapping/meandering moves for the next few sessions. Targets remain below 1.29.

 

USD/JPY:

Move lower from 72.98 (label “2?”) is very likely complete at “3?”. This could have been the whole of the correction from March 2012 highs, or part of it. 80.57 offers good support levels for a bounce into 81.80 or so.

 

US10YR:

Allow for one more high into high 131’s, but expect a move lower after that. Weakness likely to extend towards 130’.

 

CRUDE OIL:

A wedge/ending diagonal is developing. The structure is basing. So far, no impulse higher/correction lower evident. Possible to use wedge/diagonal base as a stop level (down to $100), for a bounce into at least $$106-108.

 

ESc1:

Wave III of [I] has or is about to be traded. Consolidation/wave IV is likely for the rest of this week. Targets higher cluster around 1380. For an immediately bearish view, 1386 wave I low should not be seen again before 1340. If we rise above 1386, a more complex topping pattern is likely in play, possibly a 1-2, 1-2 coil.

 

 

 

Aidyn Kussainov

1/60A Portland Place, W1B 1NN

London, UK.

+44 (0) 7917 274 989

 

Risk Assets Close to Their Peaks

A number of equity indices are close to their peaks.

 

On 28 October 2011, I wrote:

 

“EuroSTOXX 50 rallied over 30% from September lows. The rally has impulsive characteristics. It appears to be the first impulse that is correcting the August 2011 collapse, with one more upward thrust to follow in mid-2012, from much lower levels (possibly around September 2011 lows)”.

 

I attached a “roadmap”, shown here as a repost. It appears that the EuroSTOXX complied with the forecast, and is currently (end of March 2012) peaking around 2600 (high so far 2550).

 

I believe that for most equity indices, the correction of the 2011 decline is over, and indices are ready to drop again. The French CAC40, shown here on a four-hourly chart, may have already peaked. For the CAC40, I expect a decline of about 20% in the next 6-8 weeks.

 

The Russian market also appears very close to its intermediate-term high. Shown here on a four-hourly chart, the correction that began in October 2011 appears to be nearing its end. It is possible that wave V is currently unfolding, in which case the double highs established this month are likely to be breached, however I do not expect the strength to last. I expect declines of about 45% for this index.

 

An index composed of leading names in Central European space is shown on a daily chart below. This is a particularly weak chart, where I also expect serious weakness in the months ahead.

 

Finally for today, I will make what might seem like an outlandish forecast. I believe that the NASDAQ100, shown here on a weekly chart of QQQQ (Nasdaq100 ETF), is completing a nearly 10 year correction that began in 2002. If correct, NASDAQ should fall toward the post-tech bubble lows. This count and view are invalidated should the index rise a further 6.5% from current levels, to about 2960.

 

 

 

 

 

Aidyn Kussainov

London, UK.

+44 (0) 7917 274 989

 

Will It Break?

European equity markets, shown here on the hourly chart of the EuroSTOXX 50, are primed for a substantial (over 5% drop) from current levels. First supports are at 2400 (a 4.6% drop from current levels).

 

This view is invalid on penetration of 2540 (to the upside) and gains strength on closing the morning gap (2488).

 

Aidyn Kussainov

London, UK.

+44 (0) 7917 274 989

 

Asset Markets Close to Peaking/Peaked

On Thursday 9 February I wrote that there would likely be a final push higher for some equity indices, and not others. It appears that US indices, particularly the Apple-powered Nasdaq100 will indeed make a new high. I expect that it will be the final high, finishing the structure from mid-December 2011, heralding a significant “risk-off” correction.

 

The original post is below this 15 minute chart of QQQQ, the Nasdaq100 ETF.

 

Sent: 09 February 2012 18:12
To: aidynkussainov@btinternet.com
Subject: Asset Markets Close to Peaking

 

We are currently finishing the structure from the low of 31 January, NOT (I believe), from the fourth wave low of 30 January.

 

We therefore need a fourth wave (about to unfold today/tomorrow) and then a final push higher (Monday?). I expect that a lot of indices will not make a new high on Monday… but Apple-powered Nasdaq100 should.

 

QQQQ count:

The Fat Lady Sings For The European Banks

I believe the European Banking sector topped today, and will see substantial, sustained and severe weakness in the weeks ahead. Obviously, this should bring down global risk assets.

 

Of particular note are the French banks, which look downright sick.

 

This is a four-hourly chart of the Euro-Area banking index, where the rally from 2011 lows is likely over.

 

Aidyn Kussainov

London, UK.

+44 (0) 7917 274 989

 

Asset Markets Close to Peaking

We are currently finishing the structure from the low of 31 January, NOT (I believe), from the fourth wave low of 30 January.

 

We therefore need a fourth wave (about to unfold today/tomorrow) and then a final push higher (Monday?). I expect that a lot of indices will not make a new high on Monday… but Apple-powered Nasdaq100 should.

 

It is quite possible that I “lost” a wave, which would mean that we drop and do not make a new high. I think given the longer-term structures, any weakness should be respected.

 

SPY count:

 

QQQQ count:

Risk Assets Likely Peaked

As expected, global equities rallied slightly to complete structures from January 2012 lows as well as, possibly, November 2011 lows. The stage is set for rapid, substantial declines.

 

European Banks, shown here on a four hourly chart, have been one of the weakest sectors globally. I expect declines of about 25%, for the sector, in the coming weeks.

 

NASDAQ100, show here on a four hourly chart completed a longer-term bullish structure in December 2011. Potentially, it could provide a base for much higher levels, however in the medium-term, I expect the rally from December 2011 to correct as much as 8-12%. It is possible that the market will fall much further, but we will have to wait and see the nature of the upcoming decline.

 

Quite an epic structure is finishing in Emerging Equity Markets (shown here on a four hourly chart of EEM – Emerging Markets ETF). As suggested in an update at the end of 2011, early 2012 saw an impressive rally. While there is certainly scope for further upside (about 4-5%), the structure is very heavy. I suggest extreme caution for longs, and will look to establish shorts.

 

Finally for today, Russia (here on a four hourly chart) presents an even clearer bearish case.

 

 

 

Aidyn Kussainov

London, UK.

+44 (0) 7917 274 989

 

Risk Assets Peaking

Risk assets (equities, commodity FX, commodities) are nearing their peaks. I expect leading equity indices to peak around current levels, +/- 2%. In fact, I expect the risk rally to extend for a few more sessions – therefore, +2% from current levels (before topping) is highly likely.

 

This is an hourly chart of the NASDAQ100, which is currently in its final consolidation phase, before an expected exhaustive rally to around 2520.

 

This is an hourly chart of the European Banking index, which is up 30% from its 2012 lows. I believe that it will peak about 5% or so above current levels. We could get to the top directly from here, or could just as easily drop about 6% and then rally to the topping level (EUR120).

 

 

 

Aidyn Kussainov

London, UK.

+44 (0) 7917 274 989

 

A [Risk] Bearish Alternative

I am currently leaning towards a risk-bearish view - that is likely to play out over the next few weeks.

As yet, there are no bearish signals, however the way risk markets are rallying suggests increasing caution.

This is a four-hourly chart of the German DAX, which might be completing a medium-term corrective wave.

The view is similar for the EuroSTOXX 50 - the highs since the November low have been made against sharply diverging momentum indicators.

Markets About To Turn

As expected, risk based and rallied (the next day after the last update). It is my belief that risk will rally quite a bit further, possibly into February.

Below is a four hourly chart of USD against the Swiss Franc (CHF). It appears that the structure is very heavy up here, and is setting up for substantial, multi-week weakness.

Weakness in the USD is likely to coincide with a rally in risk and related assets. Below is a chart of the EuroSTOXX 50, which I believe is about to break out of its 12 week consolidation. It is of course possible that we break to the downside, however I find that difficult to reconcile with a weak US dollar. Therefore, I expect the market to break higher.

It appears that AUD has been consolidation most of 2011. I expect quite a sharp spike higher, followed by an abrupt reversal lower in the next 10 weeks.