The CAC40 is getting there, just a few more points and we will be at the upper trend line. A throw-over is always a possibility but with the proximity to the 61.8% retracement of the entire drop (see previous blogs) chances are that this trend will stop within the next week or two.

Here is little encore for the CAC 40. We like this chart because it encompasses precisely what we though – on the basis of EW – the markets would do. The “diagonal” at different degrees from the lows of 2011 is clearly visible. However the exact subdivisions may differ from the 5-wave sequence shown. It does have to be 5 waves but there may be a small triangle in the fourth wave position that would allow more time before completion. Notice, however, that we are closing in on the 62% retracement level which has always been the preferred level. It is worth while here to point out that from the beginning of 2010 to now, 4 years and 5 months , 30 trillion of worldwide QE, lower corporate taxes and a lot of direct propping up has accomplished a gain of less than 500 points or roughly 10 %. Perhaps it is because the French go to the École nationale d’administration , not Harvard and their central banker, unknown to most, never bothered to become an alumni of Goldman Sachs. Vive la difference!

The AEX, Amsterdam, is no different;

It has the exact same structure and is also at the 62% retracement level.

The FTSE has still to make a new high, now from exactly a year ago. In the mean time the CAC40, Paris exchange, has traced out an examplary  wedge which,if correct, has just a little further to go before it should dive down. We will see. Below is how it fits in the bigger picture, a big C wave withe 3 individual A-B-Cs.

See also previous blogs under CAC40.