Financial Markets Out Of Sync Part II a)

US and Europe - SHORT TERM UPDATE

Before looking at Asian financial markets, allow me to briefly update you on what has transpired since I wrote part I & II in European and US indices. 

USA indices

DJTA, short-term view: March peak, followed
by the expected correction, DATA SOURCE:
chartnexus

The only index in the US, complying with my arrows is the Dow Jones Transport Average (DJTA), and it is taking the less precipitous path. The S&P 500, DJIA and RUSSELL 2000, are in sideways consolidation since the peak on March 22, without a meaningful decline.

However, that is only half the story. 

USD,October 2015 - today, fitting well into
Fibonacci patterns; DATA SOURCE: chartnexus

The USD has been losing strength against many world currencies in recent months, - just as I had envisaged in November 2015. Back then, everyone expected the USD to grow stronger in anticipation of the four interest rate hikes in 2016. Well, we have learned since that Ms Yellen is taking a softer stance, and the markets are said to expect no more than 2 hikes now. 

I am particularly chuffed about how well the price chart fits into Fibonacci pattern. Just observe the black vertical lines. These lines indicate Fibonacci time zones, dividing up the period since October 15, 2015, the last low point in the USD. That is how i could draw the arrows previously, and the last two, red and green, the latter ending up where a time line crosses a green horizontal line, a Fibonacci retracement level. 

In other words, the USD slide should soon end, possibly at 93.82, the same level as last October. Then it will rise into early May. 

European indices

The Euro STOXX 50 are following my arrows to a 'T'. Please be reminded, the lowest point may come late in the month rather than next week. The EUR has done little to mitigate the losses during that time. The same pattern is replicated in the French CAC 40 the DAX. However, the FTSE 100 is moving sideways, just like the major US indices. 

Prognosis and Reality

Let's look at the short term period we have been discussing in Part I and Part 2. We see that the USD began to slide anew from March 8th. To-date, USD lost about -4.5%, not too far away from the -6% I set as minimum target loss for most indices. The DJTA now fits quite nicely into my weak market scenario I predicted. -4.4% down in the CAC 40, -5.5% down in the DAX, and -8.5% losses in the Euro STOXX 50 suggest that the selling pressures are mounting, and may yet affect more markets soon. Synchronisation between markets increases the greater the trading volumes become. Panic stages are usually accompanied by huge trade volumes. Remember, my target dates for the next low point ranges between 18th to 25nd April, still a few more trading days to go for market realities to fall in line with my parameters.