Market Grind - IC News

Published: Fri, 09/11/20

Last week was all about a Global correction in world equities. But different markets have it different ways. Many stopped rising even as the US was making a higher high. Asian markets ended 5 wave advances and started to correct. But Europe is not the same, US may fit the bill but not the S&P. So what does it all mean? Maybe each market will do its own thing unless a larger trend reversal develops

The good news is 5 wave moves usually occur in the direction of the main trend that if we are rising in a series of 5's that is good news longer term

Rohit Srivastava

The Truth About the Markets

Today's Updates

DAX

The German DAX took support at the trendline of the last two lows and the entire look is one of a running triangle. But wave wise I would mark it as a second wave inside wave 3. The reason to not mark it wave 3 and 4 is that wave 3 is shorter than the first. Nos it is taking off from this support and breaking out of the triangle so that is a good sign that maybe wave 3 of 3 started. To new highs then. The Jan high of 13789 could get crossed in this move.

Brazil Bovespa

The Brazillian index completed a wave 4 triangle structure and broke out into wave 5. Here 5=1 goes to 133100. its a long way up and should result in an all time high as well.

S&P 500

The S&P index is almost back to the lower Bollinger band with a little room lower near 3295 to touch it. Wave 4 of 3 down may end near this level. Needs to be watched for another day. Sharp pullbacks have become a thing of the new volatilty regime so we cannot call each sell off the crash is starting with confidence. Wave 2 was also a steep pullback to the lower end of the range.

Dow Jones

US indices closed positive and the only thing to look at is whether the hourly chart is impulsive. Impulsive means 5 waves down. Because markets always move in 5 waves in the direction of the main trend, and if they do not then the main trend is the other way. Here the hourly chart is either an a-b-c decline with an ending pattern in wave c [blue lines], or a complex correction as a-b-c-x-a-b-c, you can mark the waves either way and both show corrective declines meaning that the larger trend might still be up and the correction is over.

Jakarta

Jakarta had a big down day yesterday. A 38.2% retracement of the entire rise is at 4830 just below the wave IV low. This decline is largely wave 2 I believe. Reason being is that the previous pattern is a wedge like leading diagonal. A leading pattern is a 1-2-3-4-5 impulse that overlaps at the start of a trend.

KLSE Composite

Indonesia is not the only Asian market pulling back from a 5 wave advance. KLSE Composite [Malaysia] is another. So the rise was wave 1 and wave 2 down is going on. I am not trying to estimate where it ends you can put on a retracement tool. An actual price reversal is needed to think that maybe we have a low.

Dow Jones

Some markets like the DJI also appear like 5 waves done - does that mean a larger pullback? The problem is that this does not fit a broad based index like the S&P 500 where wave 3 is the shortest if marked like this. But S&P is thte outlier here. I checked the Transports, Russel, NYSE composite and all count as 5 waves up. But Nifty looks like the 5th wave up is still pending in the overall structure. The completion of 5 waves means wave 1 of a lonter term bullish trend completes and we get wave 2 down. On the flit side can this go from being 5 to being 9 [5+4] waves in an extended rally? Have to be open till more evidence shows up

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Rohit Srivastava
www.indiacharts.com
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