Macro: Sandcastle economics
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Technical Analyst, Saxo Bank Group
Summary: As a follow up to Steen's mention of Elliott Wave (EW), let's have a look at where we could be in today's markets.
Link to Steen’s mention of Elliott Wave (EW)
First some (EW) principles – in short:
DAX (cash) Index opened above the 0.382 retracement, more or less in the middle of the body gap between 10,438 and 9,864. A close of the gap would signal further upside. However, it could also be the completion of the ABC correction in wave 4 we have seen.
Wave 4 was initiated by divergence on RSI indicated the down trend was weakening and a rebound was in the cards.
On the DAX future/GER30 we can see the fourth wave has hit 0.382 retracement.
OMX C25: Technical picture is identical DAX. Within few points of the 0.382 retracement
For S&P 500 the waves seem to be easy to recognize. We can see that wave 3 extended further than 1.618 of wave 1. It extended 1.764.
If the waves are as I have indicated on the chart, we are in a corrective wave 4 which should take the Index up to at least 2,553. However, there is room up to around 2,775
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