Hamilton's E-Wave Analysis

STOXX, Euro Stoxx 50 index update

stoxx50 24 11 2013

We were dead wrong on this index, expecting the rebound to end approximately at the 50% retracement mark sometime in early 2011. The call would have been very profitable initially but nevertheless wrong. It took another 3 years for the (larger) B-wave to complete, if that is where it is now. That was a 30% down and 50% up move that accomplished little more than add a few marginal points. This index contains the top 50 companies from 12 different Euro countries. Included are names like Daimler (Mercedes), BMW, Bayer, Repsol, LVMH, Enel, Ing Group, BNP and many more. The question that begs an answer is why has this index barely managed to retrace 50% when the S&P, DOW, Russell etc. have all done more than 100%. Even the Nasdaq at close to 4000 has managed a greater rebound at about 80% from the 2003 lows. Perhaps it is indeed Fed. intervention. If so when tapering starts or the artificiality of the situation is removed and things are allowed to return to normal, de markets will be in serious trouble.