AEX Short Term Update

Interesting developments coming up in the AEX. Over the last few weeks we’ve seen increased volatility, related to news events such as the USA debt ceiling hoax and the government shutdown. But news doesn’t create the price, it only affects its volatility. During a down cycle any news is explained as being ‘bad’, while in an up cycle the (same) news is explained as ‘good’.

Anyway, since 2011, the AEX is in a large upward correction that appears to be ending relatively soon (given its length).

131020 AEX

I leave the chart above for what it is, the labeling is probably a mess anyway.

Looking at the chart below, wave E looks like a 5 wave as expected and should ideally top just above wave C. However it cannot exceed 391 or wave C will be shorter. However, if E marks an important top it should (like previous tops and bottoms) hit the Jupiter lines (red). So if this is indeed the case, then some kind of side ways move needs to unfold until at least early January for this pattern to be valid.

131020 AEX

Also note that Oct 18 was a full Moon and that the index is entering Mercury retrograde (between the while lines) and a Solar Eclipse (dotted line). Decent support is around the 369 level.

I’m going to stand back and wait until more pattern develops, at least for a few days. I’m not too concerned about a ‘crash’ (yet) since the long term outlook calls for new highs in 2016 and on. See earlier articles. Also during all the volatility the last few weeks, the US$ hardly moved, making me think the current price moves are not ‘serious’.