Topping

BOTTOM LINE: Chances are quite high that equity and associated "risk" markets are close to having topped. Also, USD is close to trading a meaningful bottom.

The bounce off the most recent low in October came and unfolded almost exactly along the expected lines. While none of the equity markets I follow succeeded in trading a new high, some other "risk" assets did (notably in FX and Commodities). A number of equity markets are very close to their new highs, such as the Spanish IBEX (came within 0.25% of the high so far). Internal structures of the moves higher from October lows appear to have traced out a complete five wave sequence, suggesting that it is done. This sequence could either be the whole of the fifth wave higher, in which case it will be a "failed" fifth, or it could be the foundation building block. The important thing is that either way, there ought to be a pull-back. The nature of that pull-back will give clues as to whether we rally still higher, or head south in a meaningful way. G7 bonds are pulling-back in a shallow, corrective manner, suggesting plenty more upside.

This is an hourly chart of DJ EURO STOXX 50. The structure is mature, and prone to failure.

This is a daily chart of Silver. While gold-bugs are dancing in the streets and precious metals are destined to go to the moon, I expect Silver to top somewhere around current levels (it might take a bit of time, about a week more perhaps).