Shift (3/23/12) notes that a wave 4-down correction off the October 2011 low or an outright trend change has started. This week's price action lends some support to the wave 4 interpretation (Chart 1 DAX, and Chart 2 SPX, blue). Note that the DAX is currently approaching potential support from MA50.
Chart 2 also highlights top alternative counts:
(red) outright trend change
(green) immediately bullish based on a much extended wave 3 off the October 2011 low.
Our expectation that "wave 4 retrace is likely shallow and probably time consuming in order to alternate with the deep and sharp wave 2 retrace" remains unchanged. In fact, wave 4 could turn out to be a triangle if it needs to consume more time and a deeper retrace is not required (Chart 3 ES).
(Mar 29, 930pm)
