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.

FTSE 100 - Looks very toppish

It looks like the FTSE 100 has put in an important top at 5,902. A smal S/H/S top has formed, which has an objectiv in the 5,390 - 5,400 area, but it could easily be a much deeper decline.

Short term resistance is now located at 5,670, which will ideally cap the upside, but if broken a move towards 5,705 should be seen.

Topped or topping

FTSE 100 Topped or is topping

DAX topped or is topping

BOVESPA topped or is topping

SENSEX topped or is topping

All the above has either topped or is topping out. The BOVESPA (Brazil) and the SENSEX (India) is making a big flat correction (they can still turn into expanding flats, but it's less likely), while FTSE 100 and DAX looks more like Zig-Zags.

If FED's USD 600 billion isn't headed for the equity markets, where are they going? Commodities... Hmmm it doesn't look like it (The CRB Index, Gold, Silver, Oil and most soft commodities looks tried), But if they on the way to this market, we should see some kind of moon shot soon, with oil spiking towards USD 100 pr. barrel. Gold and Silver spiking higher as the "public" rushes into the only real currency thereby ending the 10 year rally. Finally softs will push higher in one last spike, hurting especially the Emerging Markets economies as we saw it in 2008. Pushing the global economic back into recession or worse.

The other place, where the money can go, is into the currency market as the bond market doesn't seem ideal either. If the USD 600 billion heads into the currency market, I would expect them to head for safe-haven currencies, not the high yielding currencies as most commodity currencies is.

I might be a little early on this call, but it depends where the money goes first. If it's to commodities first, then expect the collapse during the end of first quarter 2011. If however the tops is already in place then we are facing major trouble before X-mas.

FTSE 100- The triple zig-zag wave [B] has finished

Both of the big European indices has finished their triple zig-zag wave [B] calling for the onset of wave [C] that should breake below the bottom of wave [A].

Short term next important support is found just below 5,200, but we are only in the very beginning of the new downtrend.

FTSE - Topping action?

Was just 10 point below the ideal target at 5,610, where red wave c would equal red wave a in length, at the same time we have a clear Shooting star indicating fading momentum, but we need a break below 5,494.75 to confirm a short term top and a test of important support 5,390. A break below 5,390 will be first serious sign that a much bigger dicline is ahead.

FTSE - Topping action

(Click at the pictures to enlarge)

The UK FTSE 100 is showing signs of topping.

The [B] wave top might very well have been set on October 20 at 5,298.54 and a break below support at 5,176.82 and more importantly 5,154.15 would be the first indications that an important top is in place. To confim the top we do need a break below 4,944.16.

Looking at the internal relationships they to point towards a possible top.

At 5,162.71 the second zig-zag was equal to the first zig-zag and to a smaller degree in the second zig-zag wave c was equal to wave a at 5,291.58, which was as perfect a hit that one could expect.

Again a top in the FTSE 100 at this point would fit nicely in my view that a top in DJI might have been set.