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Markets
have eased for the moment and in fact many have rebounded like there is not a
fear in the world.
As I look at
the chart for many markets I see a downward channel. I know I am not telling you anything new as
you have seen the rort on many markets over the last couple of weeks.
I would
like to start with the Australian market:
Click to Enlarge
You can see
a downward trend channel. You will note
the downward five wave Elliott pattern.
And lastly you will see that at least from this chart that the wave five
low is technically not far away. That is
if there is only one wave five low. But
we cannot assume that the market will suddenly rebound and move higher. After all we are at the top of a long, large,
move higher:
Click to Enlarge
So even if
markets are not going to fall over a cliff they are fairly unlikely to resume a
strong, sustained trend higher.
As we look
at other markets/instruments we can see similar patterns:
The Hang Seng as a reflector of the
uncertainties in Chinese markets:
Click to Enlarge
The DAX as it best reflects Grexit concerns as Germany has
the greatest exposure to a default by Greece – and Angela Merkel is a realist
and not one to pussy foot around:
Click to Enlarge
Copper as a proxy to the health of the global authority
continues a downward spiral:
Click to Enlarge
And the DOW forges higher and is non plussed about
happenings outside the USA.
Click to Enlarge
So we have quite a mixed picture.
My summary is that whilst markets may head higher we are
close to the top of a bull run – if we have not already arrived there.
Enjoy the ride
Tom Scollon
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