No crash, no top.

Twitter is my daily news feed, and I read a lot of gloomy doom prophecies lately. (I wonder if I can stand 280 character tweets) But the markets still don’t follow. I guess all of the guru’s are afraid they will miss out on the next crash. The Elliott wave count I’m following is not expecting a big sell off anytime soon.

Here is the new monthly chart. For comment read last month’s post, I’ve little more to add. The rally is unbelievable indeed, but no sign of a top yet.

DAX monthly

It seems August was the monthly cycle bottom. A break below 11878 will be the first sign of a possible crash, but I think we will see a new all time high first. And even then, the next dip will probably be a fourth wave.

That wis all for now. I’m writing this from Moraira in Spain, next couple of month’s I’m writing from Ottawa, Canada.

Trade safe!

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Get ready for 13.430

The weekly chart indicates the DAX just started a new wave up. It will be counted as the fifth of three of five. So after this wave is finished (with a new all time high) one can expect price to fall back to this exact same area before the final thrust higher will start (assuming my wave count is correct).

The target of this green fifth wave can be calculated to be expected around 13.430 assuming it will be equal to the green wave one, according to the Elliott wave guidelines.

DAX weekly

This week there is a pinbar with a long tail, usually a sign of a bottom. The target has been reached and the correction looks like a flag. So only a break of the low will change the picture, and this might not be as improbable as my observations suggest. The pinbar has to be confirmed by the price action of next week. The short term DSS indicator is rushing to the upside, leaving the slow indicator behind. This is called a shark pattern, like a shark’s fin, and the early bulls can be eaten alive here. The monthly chart has an example of a shark pattern at the end of 2015. So take care!

DAX monthly

Another warning comes from the monthly chart. The cycle may not be finished yet, although the weekly chart shows 4 complete cycles, often a signal that the monthly cycle is complete as well, but not always since a month is not exactly four weeks.

DAX daily

I had to adjust the daily cycle count to accommodate for the weekly count. But that turned out to be an improvement as the cycle bottoms now better fit with the indicator. A break above the 200 bar simple moving average will confirm the last daily (and weekly) cycle bottom.

Altogether I’m quite confident about my analysis (beware!) so I’m positioned for more upside, with a big fat stop of course.

That’s all for now, the next update is to be expected next month, trade safe!

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Nothing To Fear (Yet)

It has been three months since my last post. The development has been slow, the level is practically unchanged from April, and in fact there is little reason to write a new post besides that I promised to write it every month ;).

DAX spot monthly, updated July 28, 2017

The last wave up in the monthly chart looks incomplete to me. My guess is it is in wave iv of 3, so it is missing at least one new high, a pull back and another new high before we can suspect a top is near. This can take several months. And in case the alternative wave count proves to be correct, it could even take several years to reach a long term top.

DAX spot weekly, updated July 28, 2017

The weekly indicators are oversold, and a weekly bottom may be there shortly. This could be the start of wave v of 3, but the correction could just as well extend until the monthly cycle bottom which is also due. Don’t worry about the alternative wave count in this chart I do not consider it a a serious alternative any more.

DAX spot daily, updated July 28, 2017

The daily chart shows a (practically) complete zigzag correction. The most common target is just a little bit lower, so beware of the possibility of some more downside first. A break above wave B of the zigzag will confirm a new high will be reached once the correction is over.

To summarize: I do not see signals to be worried about a market collapse short term.

Next update is scheduled for the beginning of October.


Posted in DAX monthly blog | Comments Off on Nothing To Fear (Yet)