Stock markets, whether in Europe, Asia, or the United States, all appear headed lower throughout the remainder of 2009. With global equity markets moving in sync since topping in 2007, a view of the DJIA will suffice.

The decline from the 2007 high above 14,000 was in 5 waves (an impulse) and the recovery from the March low is a corrective 3 wave affair. Market movements in the direction of the larger trend occur in 5 waves. Similarly, 3 wave market movements are classified as corrections. The rally from the low is corrective (in this case a complex correction), and will therefore be entirely retraced.

Is it possible that a larger degree brings the Dow back to 10,000 or so before the larger bear resumes? Anything is possible but other markets appear to have already turned, which favors the downside from the current juncture. Also, corrections tend to end near the 4th wave of one less degree, which is the case here (see arrow). The position of the 200 day SMA (in red) also supports bears. The smaller chart is a 240 minute bar chart and shows the wave count at a smaller degree of trend. An acceleration of the decline this month is expected.


Posted by Mr Thx Wednesday, July 15, 2009


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Sekapur Sirih Seulas Pinang

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Alor Gajah, Melaka, Malaysia
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