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The Case for the "Big One"


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I believe we are coming upon a major directional decision point on many markets this week (possibly early next but could even be today/tomorrow).  We have seen a sharp rally back up from a strong drop (the 2nd strong drop since May/June 2015) in all main stock indices and Oil and Copper.  Gold did the reverse, broadly, and has been in retrace for most of this recent strong rally elsewhere.

 

Back in Oct/Nov 2015 it was the US markets that led the turn down (well Oil and Copper really but they were already in full drop mode).  This time it looks like Japan and Germany are ahead of the game, having turned mid to late March (see charts below).  Initially I though the FTSE had turn in March also but I think recent Oil and Copper/metals bullishness has prompted a FTSE surge that will be short lived if commodities turn back again.

 

My net position on all this is:

  1. Nikkei and Dax have indeed both turned and started their next leg down (in an hourly chart rally just now but nearing another turn point);
  2. US markets may have shown us a turn (to be proved by a lower high in next cycle;
  3. FTSE, propped up by Resource stocks, is likely to make a late high (or turn just short) at congestion zone;
  4. Gold is setting up for another Bullish run;
  5. If Oil turns at the 4350ish congestion zone then;
  6. This is the beginning of Wave 3 of the "The Big One";

The alternative is a break up through all this congestion and new all time highs but for me this is less likely given the market action across so many markets of late.  I strongly believe all these markets are interrelated.

 

Anyone got any thoughts on this?

 

Dax/Nikkei Daily charts:



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