AEX recap and outlook

Let’s do a little recap first. The chart below is from May 16. I projected a top around the May 25th eclipse because the following indicators all seem to come together:

  • A complete Elliott wave count (a 1-2-3-4-5 or a A-B-C-D-E)¬†
  • The Eclipse, which often correlates with a trend reversal within 1-3 days.
  • The upper end of the trend channel
  • decreasing volume, indicating exhaustion of the current trend.
  • A Jupiter channel line (red). I wrote before that the AEX is ruled by Jupiter and many important reversals happen to be on a Jupiter line
  • Fibonacci levels (not shown)

130516_AEX

Several trading days later, on May 28th, the AEX made a intraday high on 373.31, closing at 371.50, while the Jupiter line was at 372 that day. A perfect signal, and still confirmed by the other signals mentioned above.

130520 AEX short term

The question now was, is this the start of a larger trend reversal or has the AEX more energy to go higher. A bullish scenario, as indicated below, projected a potential new high in August at around 385.

130520 AEX bullish

Today, June 14th, here we are. The AEX did decline from its May high, but steeper and further than shown above. So while the chance for a bullish outcome is not completely gone, I think this is now a low probability. A low below ‘D’ will eliminate any bullish potential for the next few months.

The last few days have been somewhat volatile, but without clear signs of panic (low volume). It is possible that the AEX will test the 200 day moving average (blue line) one more time before bouncing. It did June 13th intraday and bounced.

So if a higher high is a low probability at this point, the only other viable alternative is a lower low (dotted line). My working hypothesis is that this could unfold itself as a triangle followed by another leg down into Sept/Oct. Time will tell… As new information comes in (price data) the next several trading days/weeks, I will update this¬†assessment.

130614 AEX

2 comments to AEX recap and outlook

  • Theo  says:

    Hi John, thank you for this analysis. I agree with the second possibility. The break-out of the triangle in the second week of july, if down then target is 320.
    Theo

  • The Daily Tick - AEX short term update  says:

    [...] 14June AEX recap and outlook [...]

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