DAX, FTSE100, BOVESPA and SENSEX - All in big flat corrections

The German DAX has broken down from a Diamond top-formatio, which has a target near 6,000, but as I see the price action since late 2007 as a big flat correction calling for wave [C] to reach the bottom of wave [A] at 3,577.

The UK FTSE 100 index has finished a triple top formation and first obviouse target is 4,790.

But longer term we should see a break below the bottom of wave [A]. Ideally the target of wave [C] should be near 2,827.

The Brazilian Bovespa is also in a big flat correction calling for a decline to the bottom of wave [A] at 29,435. We should see a test of the mid-line of the major Andrews Pitchfork.

The Indian Sensex is also in a big flat correction since late 2007 and should also be headed for the bottom of wave [A] at 7,688 longer term. On the way the mid-line of the major Andrews Pitchfork will act as strong support, but should ultimately be broken. Short term we need to break below 17,295 to finally confirm that we saw a top at 21,108.

Bovespa - Top in place

The uptrend since late October 2008 is collapsing. We should soon see the broken trendline tested from beneath, this test should provide an excellente oppotunity to exit the Brazilian stockmarket and the aggresive trade could even short the market at that point.

Bovespa - Has red wave [B] finally found its top?

The Brazilian Bovespa has overshoot its ideal target at 68.307 rallying higher towards 69.336 (overshooting its ideal target by 1.5%), but the massive negative divergence should cause concern for the bulls.



Taking a closer look at the finanl upmove in the Bovespa, here at the hourly chart we can see a nice five wave uptrend and wave 5 hitting the median line of the wave
2 - 4 channel adding confidence in a possible top being in place at 69,336.

A break below 66,966 and more importantly 65,728 will confirm to top being in place.



Closing in on the last part of the rally (wave v)on the 5 minutes chart we can once again see a clear five wave rally hitting the top of the wave ii - iv channel (red)once again adding confidence that the top might be in place.

A break below 66,966 would confirm the top, as wave iv may not overlap with wave i and the final confirmation would be a break below 65,728 as that would break the beginning of wave v.

Bovespa - Is wave B coming to and end?

Okay Fred here we go

Looking at the weekly charts the best fit (prefered count) is that we are currently tracing out wave 4 of [3]. The shape of wave 4 is most likely to be a flat or a triangle, that would alternate from wave 2 (principle of alternation).
We are close to finish wave B of 4. If wave (v) equals wave (i) we should find an ideal top at 68,307.61 and if wave (v) is 61.8% of wave (i) thourgh (iii) the ideal top should be found at 68,306.99. Therefore the current high at 68,059.65 could be enough to fullfil the possible targets (we are within 0.5% from the targets).

Looking at the relationship between wave 1 and 3 of wave[3] wave 3 is 4.236 times longer than wave 1. So we can expect wave 5 of [3] to equal wave 1 of [3] in percent traveled (318%), which would make wave 5 of [3] top at 93,603.

Looking at the daily chart I have concentrated on the ongoing (or just finished) wave B. It has become a double Zig-zag, where pink wave c was equal in length to pink wave 1. Blue wave c where equal in length to blue wave a at 67,655.76 so the current top at 68,059.65 has exceeded the ideal target by 0.59%, which should be totally acceptable.

Finaly looking at the last chart (hourly) we can see a clear five wave rally with a small new high at 68,059.65 so the most important demand - form, has been fullfiled. First serious clue that the top is in place is ofcause a five wave drop, breaking below 64,224.65 (wave 1) and a three wave counter rally (wave 2).

The conclusion is, that we most likely have seen a top of wave B of 4 or the top will be in shortly for a wave C down for a move below wave A at 29,435.11 for an ideal target at 23,574.38 (flat), but a triangle will have wave C stop at 40,567.72