Next upleg about to begin

The chart patterns from the previuos update are intact and prices have now also reached important support levels. I expect support to hold and the next upleg to begin early next week.

Correction over

Germany's DAX index reversed nicely in my target area of 7 400 - 7 450, and S&P 500 has also been correcting as expected.

However, I now believe the correction is over, the trend is still up and prices should continue higher.

DAX has formed a falling wedge pattern in an uptrend with positive momentum divergence, indicating the move lower is getting tired. I expect a breakout to the upside in the next few days.

S&P 500 has formed a symmetrical triangle (continuation pattern), I expect a breakout to the upside in the next few days.

Germany - DAX

Germany's DAX index (7 370) is approaching an important resistance level of 7 400 - 7 450 in the weekly charts. Price has now reached the top of trend channel and just below the upper weekly bollinger band, (currently at 7 430).

Look out for signs of a reversal and beginning of a short-term correction. The trend is still up.

S&P 500 - Correction postponed

S&P 500 reversed back on Monday and continued higher. Still there are signs that a correction is near.

Take a look at the April top below. RSI was as at a similar extreme level as now. Also, the two weekly candlesticks (red box) prior to the week the correction started in April, are identical to the two candlesticks we have right now.

Conclusion: There are signs in the charts that a correction is near. If the candlestick pattern from the April top will be repeated this time, then the correction should start next week, but this strong trend could continue higher until price reaches the top of the blue trend channel, before a correction starts. The trend remains up.

S&P 500

6 months have passed since I identified the start of this bull run in the global stock markets, (see previous posts).

I believe that Friday's reversal in the major U.S. stock indices was the beginning of a short term 6-9 % correction. It's likely it will be similar to the correction of last year, a drop to the area around the weekly 34 EMA around 1 200 on the S & P 500, as illustrated below. From there, the bull market will continue higher.

China - Shanghai Composite Index exceeded target

The Shanghai Composite Index has had a fantastic run since I identified a buy signal in July, and it has reached and exceeded my target 2900, which now acts as support.

Copper run

Copper has had a fantastic run since I identified the breakout in July. As it reached my target in August, the price consolidated and then continued higher as I expected. Now it gets a bit trickier, but the uptrend is intact as long as the support area 350-360 holds.