Short-Term IBEX Elliott Wave Analysis

Published 12th March 2018

Spanish stocks were rejected from the downward sloping 10-year trend channel resistance (depicted in red in the first chart below) in their latest advance. The subsequent drop recorded 3 waves into the downside. It is depicted by our black count. Unfortunately, a completed version of the entire triangle of cycle degree does not fit into the bigger European picture currently. It remains our base case that the downturn in primary wave E° (since May 2017) is complex and not complete yet.

The 3-wave pattern from the January 2018 high into the downside implies 3 possible scenarios: Followthrough to the downside into an impulse, a significant reversal, or an incomplete (X) wave. Normally the first case must be applied in Elliott wave forecasting. However, we go beyond Elliott waves and actually see higher odds for the other two cases. Hence, we forecast a short-term rally for the next weeks.

Mid-Term IBEX Elliott Wave Analysis

Published 20th February 2018

We see the IBEX index lagging its European counterparts over a longer timeframe. A cycle degree triangle started as of late 2007, which is a few years later than the Dax for example. Therefore we see a completion of the triangle pattern to happen as well a few years later than the Dax.

Non-confirmation in time is a typical phenomenon that can be seen in equity markets. It has been long observed and is part of traditional Dow Theory.

We expect one more push of intermediate degree to the downside. This last push, which is illustrated in our charts, completes the entire 10-year correction pattern (triangle). It will be the starting point of a secular bull market for Spanish equities. Hence, we have a very positive long-term outlook for the Spanish economy despite short-term correction potential.


Technical Analysis