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Time for an update on the long term chart. The chart below is slightly adjusted from the June update, but the concept stays the same. Unlike the DOW Jones, which is setting all time highs at each Fibonacci year, the AEX and the European market in general is setting lower highs...

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...

Wow, almost a month went by since the last update. That being said, the last update was on track and is still valid. Here’s the image from that article:

And here is the update for today:

The AEX is on its way to the upper of a large parallel trend channel...

It has been a while since the last update. Below is a snapshot from the June 14th update. This was a bullish alternative view, that at first did not seem to play out. But after a larger than anticipated correction, the AEX recovered to new highs. This is where we are now.

So what’s going on? ...

Looks like luxury branch ‘Coach’ is a leading indicator for what’s ahead for the AEX (and related indices). Top b circle end of July, dip B in Sept-Oct, and dip (C) in 2014. This saves me a lot of work

Image credit: Elliottwave.com

To keep things in perspective it is good to keep the long term outlook in mind. I do this in this post. First a bit of short term. The AEX is currently retracing a decline. Over the next several weeks I expect the area around 350-355 to be sufficient resistance...

So what’s up? It’s pretty clear by now that the peak (May 28th) is in. The decline is steep and currently oversold. I’m not a fan of overbought/oversold indicators, since they can stay in an extreme for a long time...

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 ...

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...

The 7 trading days since the top brings the AEX right at the previously projected first area of support. See image. While the decline looks straight on this chart (like an impulse) on the intraday chart it is actually choppy...