Euro Stoxx 50 Reinforcing Decennial Cycle
06/29/17 INSIIDE Track:
06/29/17 – China’s Shanghai Composite turned its daily trend up and inverted near-term cycles – creating an initial high on June 9th and projecting a subsequent, intermediate high for early-July. A peak at that time would perpetuate a ~90-degree high-high-high Cycle Progression, linking highs in early-Jan., early-Apr. & early-July.
Hong Kong’s Hang Seng Index has continued to surge after pulling back to test & hold multi-month support in Dec. (at 21,654–21,794). That provided a textbook Elliott Wave pattern (low of ’4’ wave holding high of ’1’ wave) & projected a rally to new 6–12 month highs (’5’ wave advance). That impulse wave is unfolding & nearing key wave objectives & intra-year resistance at 25,850–26,200. A peak is expected near current levels.
Japan’s Nikkei 225 Index remains positive and did extend its overall advance into June 2017, when several monthly cycles converge. If it sets a high – or at least a monthly close high (allowing for an intra-month spike high in July) – the Nikkei would complete cycles of 360 & 720 degrees from the June 2016 low & June 2015 peak. 2015 saw a series of 3 months attacking the same highs, which is why price action is the determining factor.
The Nikkei has not been able to yet reach critical upside objectives, needing a test of ~21,000 to do so. That would also fulfill the minimum objective for a 5th wave rally – the culmination of a 5-wave sequence that began in 2008. Yearly resistance for 2017 is just above that level – at 21,480–21,824/NK.
The Euro Stoxx 50 Index is an intriguing index in many respects. Its wave structure, price patterns & cycles all provide some clear conclusions. For starters, there are some multi-year cycles that provide a similar conclusion to domestic indices – all projecting an important cyclic low in/around March 2018. The Stoxx 50 has a similar 9-year high (March 2000)–low (March 2009)–low (March 2018) Cycle Progression.
That is reinforced by a potential 50% retracement in time, projected for March/April 2018 (6 years up/3 years down). Since suffering a ~30% drop in 2015/2016, the Stoxx 50 has rebounded .618 of that decline – identifying an ideal price zone at which to set a peak.
It attacked that level at the same time it was reaching its 2017 SPR (projected resistance for the year) – at 3278 (its intraday high was 3279) and nearly reaching its yearly LHR (~3350).
Following that peak, the Stoxx 50 turned its weekly trend down and then entered the customary 1–3 week bounce. It tested its new weekly trend resistance & is reversing lower, corroborating the overall outlook. If that recent (May ‘17) high holds, a similar magnitude decline would ultimately carry the Stoxx 50 down below 2200.
If the May 2017 peak remains intact, this index would maintain the potential for successive declines of similar duration – with a bottom anticipated for March 2018 (10 months each, April ‘15–Feb. ‘16 & May ‘17–March ‘18). The Stoxx 50 is already validating the May ‘17 peak and is poised to flatten and/or reverse lower its monthly 21 MAC in July 2017. Its monthly trend pattern is also projecting a minimum 2–3 month decline.
All of this is further validating the 2Q 2015 peak (the third lower peak in a succession of highs) that perpetuated a 30–31 quarter low (3Q ‘84*)– high/low (2Q/3Q ‘92*)–high (1Q ‘00)– high (3Q ‘07)–high (1Q/2Q ‘15) Cycle Progressionwith uncanny precision. [*Pre-2000 swings are measured with data from FTSE, since even DAX was dealing with pre- & post- German unification.]
That same 7.5–7.75 year cycle projects a subsequent low for late-2022, the same time the 40-Year Cycle portends the next multi-decade bottom (1942, 1982, 2022). The Stoxx 50 needs to drop below – and ultimately give a monthly close below – 3050 to confirm a multi-month peak.
The German DAX Index attacked upside targets & yearly resistance (12,700–12,900/DAX) and set an initial peak in June 2017 – the culmination of a 16-month low-low-(high) Cycle Progression & a ~3-year high-high-(high) CycleProgression (and 10 years from its June 2007 peak).
It has created a textbook ‘5’ wave = ’1’ wave advance, after which it completed an Intra-month Inverted V Reversal lower while turning its daily trend & daily 21 MAC down. A weekly close below 12,620/DAX is needed to signal a 1–2 month peak.
The FTSE peaked in line with its 23–26 month low (March ‘09)–high (Apr./May ‘11)–high (May ‘13)–high (Apr./May ‘15)–high (March–June 2017) Cycle Progression. It needs a weekly close below7377/FTSE to turn the weekly trend down & confirm a multi-month peak.
The CAC has pulled back after spiking to new highs but failing to close above the April 2015 peak of 5,283/CAC. That could be a brief ‘5’ wave spike high failure, but confirming action is the key. It needs a weekly close below 5176/CAC to turn the weekly trend down & confirm a multi-month peak. [Reserved for subscribers only; See July 2017 INSIIDE Track for details]”
European equity markets (Stoxx 50, DAX, CAC-40, etc.) validating May/June 2017 cycle highs and intermediate sell signals. July/August 2017 decline expected. Decennial Cycle argues for July–Nov. 2017 decline in most stock markets, repeating an uncanny 10-year pattern that dates back over 150 years.
Three decisive longer-term cycles should be in negative phases by the end of July 2017 – including the 40-Year Cycle (negative in 3Q/4Q 2017), 17-Year Cycle (downturn in March 2017–Oct. 2019) & 10-Year Decennial Cycle (likely sell-off in July–Nov. 2017, potentially stretching into March 2018). See Weekly Re-Lay & INSIIDE Track for additional details.