Technical Analyst, Saxo Bank
Summary: As a follow up to Steen's mention of Elliott Wave (EW), let's have a look at where we could be in today's markets.
Link to Steen’s mention of Elliott Wave (EW)
First some (EW) principles – in short:
DAX (cash) Index opened above the 0.382 retracement, more or less in the middle of the body gap between 10,438 and 9,864. A close of the gap would signal further upside. However, it could also be the completion of the ABC correction in wave 4 we have seen.
Wave 4 was initiated by divergence on RSI indicated the down trend was weakening and a rebound was in the cards.
On the DAX future/GER30 we can see the fourth wave has hit 0.382 retracement.
OMX C25: Technical picture is identical DAX. Within few points of the 0.382 retracement
For S&P 500 the waves seem to be easy to recognize. We can see that wave 3 extended further than 1.618 of wave 1. It extended 1.764.
If the waves are as I have indicated on the chart, we are in a corrective wave 4 which should take the Index up to at least 2,553. However, there is room up to around 2,775
2024: The wasted year
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
