Major Indices, Wednesday April 10, 2013

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SETUP:

This is a comparison between 6 Stock Indices by using their Daily Charts.

SITUATION:

There's usually some correlation between indices but this time this relationship seem to be broken.

Although each chart shows that we're completing MAJOR wave 5 (upward) it's interesting to notice that:

• The European Indices (CAC40, DAX30 and FT100) seem to have completed 4 MINOR waves up (our of 5) and they're starting the last one up.
• The US Index DJ30 seems have completed only 3 minor waves up it might start minor wave 4 (down).
• The US Index S&P500 seem have completed 4 minor waves up and it's almost done with minor wave 5 up as well
• The Australian SPI200 seems to have completed all minor and major 5 waves up already. It has also completed retracement wave A (downward) and it's staging the new retracement wave B upward.

 CONCLUSION:

 If we take this thesis for good:

• In Europe the indices might try to make a double top or a new top
• The S&P500 is almost at the top
• The SPI 200 is doing a sort of double top or lower
• DJ30 might actually touch/broke the upper line of the channel and then retreat considerably

 TRADING:

The dividend season is approaching in Australia and I wouldn't enter the market now. After completing wave B (upward) the Index SPI200 might stage a considerable dip. that could actually be a good short.

The S&P500  might be close to the very top.

DJ30 seems to have stage an overextended minor wave 3 and could stage a retracement (minor wave 4).

As the trading risk is getting too high  it might not be worth it till we see more clarity.

This time I'll give it a miss till I see some good signs of reversal.

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