Published 4th March 2019
The Eurostoxx 50 extended further to the upside. Wave structure is it a stage where bulls must score convincingly. The set-up is right at a 3rd of 3rd junction. This implies that price action must carry on within the yellow trend swiftly. The reverse conclusion is bearish. Any failure to carry on within the yellow trends signals that a double zig-zag unfolded from the December 2018 low.
There exists undoubtedly some attractive upside potential for European equities at this junction. However, the divergence within the yellow trend relative to the orange trend as well as the macro picture raise some doubts about the black scenario. The setup arrives at a junction that saw a big stretch in the major US indices. American indices still dominate the direction of the other major indices worldwide. Last but not least, bullish sentiment has gotten back into the market.
Picking a top is risky at this stage. However, a nearby decisive break of the yellow trend channel changes that conclusion and is bearish. It will flash a short signal!
The analysis above is a historical abstract of our Eurostoxx 50 Premium Analysis. Subscribers can access multiple timeframes, which are not displayed on this page.