Right Shoulder

BOTTOM LINE: Markets have been moving beautifully along the expected lines. Right now, there is a strong chance of a bounce of about 3% in G7 equities. I expect this to last into early next week. It is likely that this push higher will be led by crude oil moving above its recent highs.

Below is a daily chart of the German DAX. The index, like many others, has now breached very important supports - the rising trendline from the March lows, as well as the 55 day moving average. I expect some sort of consolidation to now take place, which could take the index about 150-200 points higher. Eventually, I see this index falling to at least the 200 day moving average through November.

Crude oil (on the daily chart below) has likely completed wave four of its unfolding leg higher. It will now likely proceed to make a new high above $82, and could extend as far as $85. This will likely pull equities higher, and coincide with [corrective and temporary] weakening in the US Dollar.