The World -DAX

I am getting thoroughly irritated by this market. September is typically the worst month in the year, this time you have to go 71 years back to get a better one. Everything takes unbelievable long with very little happening. Also you could still be wearing diapers but as long as you speak with a South African/ Down Under accent you are an immediate guru. In Canada everything is perfect or so we smugly believe, the truth is more that we are a backwater without even knowing it. In any case this is a good time to re-evaluate the bearish case.

There are a number of things one would look for. An a-b-c correction of about 62% (it can be any other number but on average this occurs often). A retracement to the 4th wave of previous degree. An RSI or MACD that is turning over. A full moon if you want to howl with the wolves and an equinox to tell you that winter is coming. We have all of the above for the following markets;

  FTSE2010 SPX2010

NYA2010 COMP2010

CAC2010 AEX2010

rut2010 smi2010

The charts are from the S&P, COMP-Index, , CAC, AEX, Russell2000, NYSE, and the FTSE. What is clear is that ALL of these have traced out nice symmetric A-B-Cs, all are within a few points of the .625 level, all are back at the level of the 4th wave of previous degree and in most cases the C is approximately vector equal with the A. A few could move a tad higher but not much. (Again click on the charts to enlarge or move them around.)

The overwhelming conclusion is that the bear is in all probability waiting around the corner. As mentioned the DAX is the only exception having recently made a new high but that can be explained in different ways.