Saturday, August 13, 2016

MTU Weekend Ed. - Revisiting Breakout and 2016 Scenarios (8//12/16 close)

We highlighted several scenarios in 2016 Scenarios (7/22/16). Those scenarios remain on the table with recent price actions (Chart 1).

[very bullish - green] A proper impulse wave from the Feb low is developing. Wave 3 is currently in progress and may extend.

[somewhat bullish - blue] A proper impulse wave from the Feb low is completing. Wave 5 is currently maturing. The advance from the Feb low could be just wave 1 of a larger impulse wave or could be the entire upswing.

[very bearish - read] The upswing from the Feb low is actually a three-wave structure. Its wave B is an expanding triangle. The post-triangle thrust, wave C, is maturing.

Thoughts on the very bearish scenario
If the upswing from the Feb low does conclude as an A-B-C structure, it can be wave (D)-up of an expanded triangle wave [4] since its mid-2014 high (Chart 2).  See Breakout (7/15/16) for our latest discussion of this scenario - "[red] Wave [4]-down since the 2009 bottom is an expanding triangle. The pending high is its wave(D)-up.  Wave (E)-down is next to take out the Feb low. "

To the extent that the above scenario has merit, it is interesting to note how one can fit a contracting triangle in the German DAX index (Chart 3). 







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