AEX topping process and an alternate view

130430 AEX

The AEX is in a topping process. While the Elliott pattern calls for a new slightly higher high (360-365) as described earlier, the AEX appears to be stalling. If we combine this with the cycle count, we can only conclude that something else is going on. Part of ‘predicting’ where the market is moving is to consider all possibilities and then narrow down these paths as more data comes in. In our case we use daily data, so every day new information (price & volume) is added to the puzzle, reducing existing ‘wave counts’ and adding new ones. Today I’ll look at one of these alternates.

Perhaps the index is forming an ABC flat that started in late January. Currently we are in wave B of this flat, which is possibly tracing out a contracting triangle. This scenario fits well with the cycle count.

Cycles are either left-, middle- or right-translated, depending on if the cycle crest is early or late. And the saying goes: ‘The sooner the top, the larger the drop’. The first (white) cycle has a right translated top so the drop to the end of the cycle is moderate. The second (white) cycle has multiple tops, so the end of the cycle (point C) is probably similar the the start. This cycle is also subdivided in two smaller cycles (grey). The 2nd one, topped at wave ‘a’ (yellow). This is early in the cycle so the drop to the end of the cycle will be significant.

Note that this scenario becomes invalid if top a (yellow) at 358.92 is taken out. If it holds, a decline to 315-320 in June is projected. Note that June 15th is expiration and June 22nd is a Bradley date.

If this plays out it will have VERY interesting consequences for the AEX all the way into 2014.


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4 comments to AEX topping process and an alternate view

  • The Daily Tick - DOW Jones Update  says:

    [...] 30April AEX topping process and an alternate view [...]

  • Cees  says:

    Hoi John,

    Je hebt een mooie site en het is eindelijk gaaf om te zien dat er ook goeie analisten te vinden zijn op het web. Chappoo.

    Je bijdragen zijn fraai, keep on!

    Zag net dat je de alternate view AEX meer waarde ging toekennen.
    Stel je echter dit voor: Er is een rentebesluit vandaag en qua tijd (en aanleiding zoals rentebesluit) is het niet gek dat er toch een major top komt te staan?
    Stel je voor dat we vandaag spiken na rentebesluit en een hogere top een split second plaatsen?

    Dan opeens kan er dus de major top staan!!

    Ik wilde je deze mogelijkheid even delen, niks meer of minder.

    Ik zou het leuk vinden contact op te bouwen, wellicht kunnen we waarde toevoegen aan elkaar, daar ik vooral in W.D. Gann gespecialiseerd ben.

    groet, Cees

    • Cees  says:

      Local time 15:50 uur; shortposition taken

      • JohnUSA  says:

        Enter at your own risk ;)

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