So far, so good. Down about 8% and wiping out the previous 9 months or so of gains. It is not immediately clear how this drop should be labelled. It is possible that a number of 1-2s started the process; alternatively a small wave 1 might be complete and we have just done an a-b with c still to follow for a wave 2. Whatever the count, 7 is never a complete sequence!  In any event this drop is not over. The minimum initial targets are at the base of these structures, 4050 or 3950 depending on how you interpret the wedge. More downside in other words. Same for the Dow, see previous blog;

The CAC briefly reached a level where it had last traded in November of 2013, some 8 months ago. The loss, from the peak, is now about 5% and this index is sitting on the 200 day moving average. From an EW perspective the interesting thing is that this initial drop can be viewed as a 5-wave affair which itself may be an initial first wave down. Time will tell.

See also previous blogs! The CAC40 peaked right at the end of this “diagonal” wedge pattern. If it does what it should the index should drop at least to the base of the pattern, that is about 4050. As it peaked at about 4600 it will then have lost 550 points or roughly 9%. We will watch it closely to see how it does this if it does this. Stay tuned.

See also previous blogs;

The week (not two) has gone by and now all the required subdivisions are there and similar patterns have shown up in other indices such as the Dow , albeit with different starting points. The peak is perfectly at the 61.8% retracement level of the entire “Great recession” drop and coincides with a first in financial alchemy, negative interest rates, introduced yesterday by whatever-it-takes Draghi .