Daily Archives: April 7, 2018

DAX 1995-2018: Elliott Wave Review From A Cycle Degree Perspective!

This is the 4th world index that I looked at recently. It looks like the DAX investors have had a wild ride in the past and now it’s coming back!  The DAX history is linked to the US markets as the DAX crashed and burn right along with US stock exchanges. Back at the 2000 bubble, I thought there could be an expanded flat, but it also works as a great diagonal 5th wave in Minor degree. After 2000 the bottom fell out of the DAX but this DAX crash counts out very well as a zigzag.

The zigzag bottomed in early 2003, after which the DAX took off in yet another bull market. The DAX also counts out well as a set of 5 waves in Minor degree. “In a bull market “every” 5th wave top must be joined or connected to a one higher degree number.  So in mid 2007 the 5th wave in Intermediate degree topped, but also stopped on a wave 3 in Primary degree. After which it crashed again.

Then by early 2009 the DAX bottomed right along with the rest of the world, but also participated in the 2009-2018 bull market. The 5th wave in Primary degree counts out very well as higher quality 5 waves, which keeps it out of the diagonal wave classification. I could only squeeze the 5th wave in Primary degree into the chart, which should be capped. The 2018 peak, is a wave 3 in Cycle degree, not SC degree and especially not GSC degree. Being out by just one degree, we can be out by a mile, so we want to take care about what we stick onto the 2018 peaks.

All my DAX peaks are ending with a wave 3 count and so are all my other indices that I work with.

A friendly warning, “Don’t trust any wave count ending with a 5”  from anywhere on the Internet. They have broken the Elliott Wave sequence, if they don’t cap any bull market 5th wave.

To confirm any future Cycle degree 4th wave correction, it will take a very attentive wave analyst to keep tracking the DAX which I don’t have but I will track some of the bigger turns when I can.  It’s the crowd psychology that is being damaged as they don’t know what to do with all this volatility. One expert claims that this is the most volatility he has seen in the markets in his entire  career.  What? Stay tuned as youv’e seen nothing yet!

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Canadian Dollar Daily Chart Update

The largest degree and wave pattern I show at the top is an Intermediate degree 4th wave.  Since I show an inverted zigzag this would mean our Canadian dollar was in a big bear market rally and when that is identified correctly, we know that a complete retracement should happen. Since the December peak our dollar has only produced one big lower high, but has produced several smaller lower highs on the way down.

With a 4th wave top in Intermediate degree, we know that we should expect a 5 wave decline in Minor degree.  That’s in a perfect world, but a diagonal decline can also produce another declining zigzag. Another zigzag is my  least favorite option, so for now I will stick with a 5 wave decline in Minor degree.

There still could be some short term upside yet, but then our dollar should reverse and head south again. Back at the February 2017 price peak of, .81 cents could be the highest reading for all of 2018. The February peak could still take many years before it is retraced so we have to buckle up and ride this bearish roller coaster for a lot longer.

Once this rally reverses, then a new low should happen, but then we could be setting up for a wave 1 bottom in Minute degree.  A wave 1-2 in Minute degree is the second set of a 1-2 wave count and the third set of 1-2 waves will be in another set of 5 waves in Minuette degree. Each set must be one degree lower and by the time the time the third set arrives, they will turn invisible.  Being specific and then the markets do the opposite, we know that a review would be instantly called for.

The 4th wave top in Intermediate degree is painting us a picture that this wave count has advanced past a Cycle degree peak, which was back in late 2007 and it’s still not finished. The 2007 peak was a wave 3 in Cycle degree.  When joining the peaks and the  bottom we sure can produce a big wedge, at least in Primary degree. When the wedges are finishing then this is a very powerful setup for a potentially new bull market phase that can last another 5-8 years.

The explosion of the VIX is a prime example, how powerful wedges can be in forecasting huge moves in advance. Right now, I’am getting a small collection together, which have huge Primary or Cycle degree wedges in progress, with many of them still being 2-3 years away from completing. Identifying these big wedge formations early is the key, as it’s all about “seeing it coming” that’s important.

The “Wedge” and two parallel lines are my two trend line configurations that I use, but I try to keep that to a minimum as when they use trend lines too much, they lose their importance.

Even though the commercial traders have small net long positions, they can stay like that for a very long time. Is a 10 year bear market long enough for you, or do we need a 13 year bear market before our CAD turns super bullish again.

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