German Dax (12,838)
European leaders, after a fractious summit that lasted 5 days agreed on a 750 billion stimulus plan for their coronavirus-hit economies on Tuesday morning.
The German Dax index after hitting a high of 13,313 on Tuesday, went into consolidation for the following 3 days and closed at 12,838 on Friday, a 3.5% drop from its Tuesday height.
Looking at its 30-year chart, Dax, after its sharp drop in March by 38% to complete the wave C of its mega wave (4), it has started forming its mega wave (5).
The shape of Dax's 6-Month chart looked very similar to that of Dow but is more bullish than the Dow in the sense that it has moved higher than its June's high whereas Dow is still unable to break its June's high. Dax is on its wave (v) of major wave 1 of its mega wave (5).
Dow (26,469)
Dow dropped another 182 points (-0.68%) on Friday after dropping 353 points on Thursday.
Both the Dax and the Dow appeared to move in an up-trend direction despite of the Covid-19 pandemic, plunging GDP and unemployment. The only explanation appeared to be the money printing by many countries. It is a liquidity driven market. The asset-bubble continues to grow. When will it pop?
Roubini said recently, "I expect a tepid recovery to eventually morph into a depression even more severe than the 1930s".
It may be good to be cautious and be alert to watch out for that bearish wave count until a stage it can be ruled out confidently. But be alert to notice signs that Dow is heading into this option.
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