Many ‘gurus’ seemed surprised by todays 9 point gain and scrambled to find ‘news’ to ‘explain’ this 2.67% rise. In my opinion news is the result, not the cause. By disregarding news and ONLY looking at the ever developing chart pattern, see past articles, there was no surprise. There was only probability. In this case, all the facts lined up. Let’s take a look.

130423 AEX

As described earlier, the AEX needs to make one more high to complete a pattern that started at the low in Sept 2011. Ultimately this top needs to be around 360-365. This will complete the last piece of an upward correction that looks like an ABC (zig-zag) started at Feb 26th. There are other ways to label the current trend but they also call for a completion of the pattern. The AEX might have a hard time moving past an area of heavy resistance, which is shown using the Volume Cloud Indicator. There is also a trendline over the tops (dotted). So we’re not out of the woods yet, but todays development adds to the short term bullish case.

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