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When to expect the coming 20 week trough in markets worldwide

Markets around the world moved down today, sparking off what I think will be the move down into the 20 week trough. As discussed in this recent post and video from Sentient Trader’s David Hickson there seems to be a divergence in phasing between the US markets and the European markets. I had my doubts that the FTSE was diverging but the strong move up into this current peak has persuaded me that infact the October low was an 18 month trough, as opposed to a 40 week in the US indices. Lets have a look at four of the main equity averages: DAX and FTSE on the European side and the NASDAQ and DOW stateside.

DAX INDEX

GER30_£__daily_27_01_2015

  • German DAX most bullish of all European Indices
  • Trough expected mid February
  • Not expected to break 18 month low
  • Breached 10 day FLD today and bounced off it
  • Fundamental interaction was rife during the move up (ECB QE, SNB etc), distorting the cyclic picture, hence the pinned troughs.

FTSE 100

FTSE100_£__daily_27_01_2015

  • British FTSE less bullish but still formed a peak above the previous 80 day cycle high
  • Trough expected mid February
  • Clear 40 day cycle
  • Breached 10 day FLD and bounced strongly

DOW JONES

US30_£__daily_27_01_2015

  • 40 week cycle preferred here at the October low
  • Just took out previous 80 day peak, missed 20 day FLD target (undershot).
  • Breached 20 day FLD and remained below
  • Trough expected mid February
  • Expected to get near or take out the 40 week trough en route to the 18 month low in the Summer

NASDAQ

NAS100_£__daily_27_01_2015

  • Less bullish than DOW, failing to take out previous 80 day peak
  • Clear cyclic picture
  • Breached 10 day FLD but not 20 day FLD so far.
  • 40 day cycle trough is below 80 day trough, bearish sign.
  • 20 week trough expected mid February
  • May take out 40 week trough.

So, in summary, all the indices are pointing to a market bottom of 20 week magnitude in the middle of February 2015.

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