From the Sept 2012 lows i suspect this is working a complex WXY correction, i am looking for a move into the 2600-2700 area although from the last swing lower some sort of 3 wave bounce is all that is required
Ideally it sees towards 2700 but that might be based on seeing the DAX near 7600 and the SPX near 1480
But once this idea is finished i suspect this advance is completely reversed and target under 1900
From the March 2009 lows we can clearly see that the market
resembles a 3 wave advance, this is a key component to Elliotticians as it
suggests the advance is a corrective move against the decline from 2007-2009.
If you look closer you can clearly see what looks like a
wedge shape. I am currently working an idea on the SPX to see a new yearly high
around 1480-1500SPX either into the year end or the start of next year.
Hence which I think the DAX is likely to drag other markets
higher, you can also see the 3 wave decline from the September 2012 highs, this
is a strong sign that the US markets likely made a corrective decline and this idea
fits in with my long term ideas for the US markets as well, to run up and test
the Sept 2012 highs around 1480 on the SPX.
Currently I think the DAX is working an ending diagonal and
now in wave , so a target towards 7550-7600 is favored, which should see the
SPX see that new high I want to see for its pattern.
The advance has been a strong move, but we still need to see
some sort of 3 wave move, I suspect it start to get choppy as it enters
7400-7500 area, but overall I am looking for a new yearly high to complete the
ending diagonal idea.
To non technicians you can see the bearish wedge shape,
although on this scale it can still take a few more weeks to finish as it’s
lacking a new price high.
So the bulls really need to stay focused on this idea as the
market approaches my target band I strongly suggest caution for anyone still
long this market, as if my interpretation is correct and we make a new price
high, the expectation is for a strong reversal, one that could ultimately
suggest this market is going back to test the Mar 2009 lows and target 3500.