DAX

SI, Siemens and the DAX

Hamilton

si june 2012dax june 2012

We have steadfastly maintained that Siemens would , at the very least, trade down to $81 on the ADRs. It has. This level corresponds with the lows of the B in the larger B wave (actually more like $79). We do not expect it to stop here – after all the large B wave suggests a new low sometime in the future – but the count is presently not entirely clear and actually differs slightly from the DAX itself. Both charts are roughly equal, on both we are, very roughly , in the middle of the last 5-year range, but whereas the DAX sports a rather distinct wave 2 from last year’s Oct. lows, Siemens does not. Both are still pointing down.

DAX, update

Hamilton

 

dax may 2012

The DAX also follows the same patterns but somehow manages to retrace 80+% of the preceding drop as if nothing has happened. Perhaps because they are sitting at the other end of the see-saw than the club Med countries. Germany’s neighbour , the Netherlands prefers to chug along the bottom, but the pattern is nevertheless , essentially, the same. Oddly enough, Holland and Australia, and  Germany and Canada twin up with each other the best.

aex may 2012

DOW, DAX, SPX, NYA , STOX600, TSX, DJT

Hamilton

indu feb8 2012

The DOW has clearly exceeded its May 2 high of 12876 by about 50+ points. This would normally negate the count, that is the one where this was wave 1 down followed by an a-b-c correction/rebound. I simple do not know what to do with this! The structure is just fine, only it should not have gone this high. EW is supposed to work when markets work, that is when there are a multitude of participants who freely make up their minds to buy or sell. Perhaps this precondition is no longer met now that CB’s have thrown in 15 trillion into the punch-bowl (1/3 of the value of world equities!), never mind all the other “stimulating” factors. I just do not understand but at the same time will not get religious or dogmatic about it. Other than the Nasdaq, which is in a completely different phase, just about every other major index has NOT negated this count, so for the time being we will stick with it. Below are some examples;

DAX feb 9 2012SPX feb 9 2012NYA feb 9 2012

stox600 feb 9 2012TSX feb 9 2012DJT

You can click on them to enlarge. Un till such time that a few more of these “negate” the count I will take the catholic approach and simple nullify this one  single incident.

DAX, EWG and Siemens

Hamilton

Dax oct17 2011 ewg oct17 2011

si oct17 2011

The question is are we in wave 4 of 1, with 5 still to go to complete wave 1 (in black), or did we in fact already complete the entire wave 1 and are now in wave 2 (in blue)? Certainly the black interpretation is the more elegant one, but fortunately it does not matter all that much at this point as wave 3 was the lion’s share of the drop anyway so the proportion of either wave 4 of 1 or wave 2 are not that different. We have already retraced about 40% and are at a wave 4 level, a move to about 62% would not be negligible but certainly not tradeable for most of us. That is why we recommended getting out of longs the other day.

This market is like a casino and roulette is played without the numbers, just black and red and as a result it is a binary proposition, that cannot be controlled too well . This risk-on , risk-off  approach does not leave much for error. You should stay short for the next few months as this market has a long way to go. In terms getting short again , or more so, the 62% retracement level is as good a spot as any, but we may not even get there.