How bad can it get for the European stocks during this ongoing crisis? In particular, can Germany’s DAX index weather the storm? When one thinks back at how nicely the US stock markets performed during the last couple of years, I am probably going to be frightfully wrong with this analysis. Yet, you should be aware of how bad it can get if things go the way I have shown here.All I have done is to use my knowledge of the Wave Principle, and come up with one scenario. This scenario respects all the rules and guidelines that needs to be followed while using Elliott Wave Principle. However, the picture could change as we go forward, and hence you should be aware that this doomsday scenario is currently mostly academic. (Guess I have given sufficient room to escape your wrath if the index goes straight up!!)
Anyway, I have also illustrated how you could count the waves from the significant low posted by the DAX index in March 2009. At the very least you would have gained some insight at how the waves tie in with each other. Look at the charts in the same order as posted.
Happy New Year folks!
20 Comments
Mr. Ramki,
Very interesting to see your analysis of SPX and DAX. You have the SPX as an impulsive 5 wave move from 2009 followed by a correction in progress, while DAX as a corrective move from 2009 followed by start of an impulsive 1-2 move down in progress. See attached chart http://i.imgur.com/TuRfs.png . Both indices are very highly correlated since 2008. How come two different views?
Srinivasan.
Hello Srini, As you know I am more concerned with getting the major direction correct.Then it becomes easy to trade the smaller waves.We should give ourselves the flexibility to change our counts.After all, we are doing all this to help ourselves, and not to show others we can do Elliott Wave analysis properly (and to get some paid subscriptions, or clicks on some Google ads on the website!!)
Thank you for your response. I’m trying to learn from your wisdom. I’ve been successful in convincing my wife that we should move to cash in our retirement portfolio. Make a decision when S&P nears 1000 to decide if we want to go long again or wait longer for the dooms day scenario as indicated in the DAX chart.
Regards,
-Srinivasan.
Hi Srini, it’s my pleasure to connect. Best of luck with your plans
Ramki,
Let me ask you this, did you see any thing in dax which you don’t see in s&p500, or the dax count could be an alternative count for s&p 500 as well?
Sriman
Ramki,
Let me ask you this, did you see any thing in dax which you don’t see in s&p500, or the dax count could be an alternative count for s&p 500 as well?
it’s not just spx and dax, but lot of world indexs are correlated some are more and some are less. Just wondering to figure out what the nifty is going to do?
I appreciate your posts and comments and I find your book is very educational to every one, who wants to participate in stock market.
Sriman
Hi Sriman, tks for your comments. I’ m looking at the two indices separately. Overall, in the big pic I sm bearish for the SNP as well.
Dear Sir,
I enjoyed the detailed charts, I could question myself on the charts and found answers in comments of the charts.
Thanks
Hello Ramki,
if we look at min&max prices wave iv comes to price zone of wave i in wave 5. Does this brake Elliot rules or should we consider always close prices?
Thank You for your great work!
With best regards,
Stani
Hi Stani, Overlaps are allowed in a diagonal triangle which often appear in fifth wave position
(Guess I have given sufficient room to escape your wrath if the index goes straight up!!) xDD 🙂
Nobody could have explained the analysis better ramki ji.
Happy new year to you too.
Waquar.
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sir ur Elliott Wave Analysis is great… thanks alot………
shafaat……….
Sir DAX moving well above 6500. Any change in view ?
Hi Riddhi, The discussion on Dax earlier was a doomsday scenario, and I thought i made it quite clear that it was still a changing picture. Anyway, if we get a move below 6160 now, that is a confirmation that we will go a good way lower. Best.
Hi amazing and educational blog which i have been reading from near inception, but for the first time i commenting!
Sir now the dax has far exceeded your expectations do you still expect a significant correction, a small correction has already started with the dax falling from 7200 level to just today below 6900 is this in your opinion a sign of things to come?
I feel we may have a sizeable correction coming on the s&p to the 1100 level which is inline with your thoughts this would equate to circa 5500 dax??
Once again thanks for a great blog and all your work, much appreciated
Hello D.S.S, I have posted on DAX today. Good luck.
Hi Ramki,
I’m new to your blog, so first I would like to thank you for sharing your work.
I’m experiencing difficulties to understand your labeling; could you please assist me with this?
For example at a chart above (http://www.wavetimes.com/wp-content/uploads/2011/12/Dax-d-19-Dec-2011.jpg) you use a green ABCX formation, then a red ABC follows… and finally an orange 1???
I am certainly not an expert at EWP, but still…
Thank you very much in advance, D.
Hi Dimitrious, welcome to the club. If you are new to Elliott waves it might be a good idea to first read a good book about it. A lot of people think that “Five waves to financial freedom” is a good starting point. About my own counts, the orange wave 1 that came after the second ABC could actually be wave A, but my approach to counting is to be practical and not academic. I am flexible about changing the label to “a” later on. Hope this clarifies.
Hi Ramki,
been following your posts with interest, thank you for sharing your knowledge,
now we are 7 month into 2012,
have you chanched your count on the DAX or do you still come up more or less with the same conclusion? would be nice if you could give us another updated chart.