AEX update

While the AEX decline since the May high looks choppy on the intraday chart, it can be subdivided and counted as 9 sub-waves. And 9 sub-waves is an impulse. If this assessment is correct, which I believe, the implication is that this is the first move down of a larger down trend. I think this is correct because:

  • If this was merely a correction on the larger uptrend, the retracement should not been as deep as it is.
  • The May high hits the Jupiter lines almost to the point, and has been an indication of important past lows or highs (see chart)

A nice trend channel can be identified (yellow lines) which will hit 345 on Thursday. Given several other indicators (not shown) as well as the volume cloud indicator (the ‘flames’) I expect some support on this ’345′ line. A cycle low is due as well. The AEX should then bounce and go sideways-to-up for several weeks, but not make a new high. Then the AEX should decline into the September/October timeframe to at least 320 (another Jupiter line). This will fit nicely with the longer term outlook, as described in earlier articles on this site. Also note (see chart) that volume is declining, indicating that the sell off is losing steam.

My working hypothesis is a low at 345, then sideways into July, possibly August, followed by more decline into Sept/Oct to 320.

130612 AEX

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