The 2009 cycle is ending across the World Indices. Many Indices show five waves already since the lows, but some have been weak since the previous peak sometimes around 2018. Indices like $FTSE, among others, are reaching the Blue Box area since 2018. The following chart shows the extreme area in $FTSE:
FTSE Reaching Extreme Area from 2018 High
The Above chart shows the extreme area since the 2018 peak and the proposed bouncing area (the blue box). The bounce in FTSE can make some Indices and stocks to trade into new highs since 2009. We do understand that within the big market spectrum, not every Index will move and make the same highs and lows. However, they will trade together to some degree. This concept is called the second dimension, which is when the instrument agrees in swing direction, but not in overall direction. Home Depot INC (HD) for example is still trading within the 2008 cycle. Below is the monthly chart of Home Depot:
Home Depot (HD) Monthly Elliott Wave Chart
Above chart shows the rally in Home Depot since all-time low develops into an Impulse with the minimum amount of swings in place. The red degree (Cycle degree) is clearly showing five waves, which makes the longs at risk, but the persistent strength until this point makes the case still to reach the $267.00-$282.00 area. It is evident that soon the 2008 cycle will end sometimes this year, but as far as the Elliott wave channel remains in place, more upside should be happening. Below chart shows the channel:
Home Depot Weekly Elliott Wave Chart
Above weekly chart shows the rally since 12.2018 low, the Elliott wave channel and future path into the $267.00 area. As of right now, last week’s drop still can be a wave ((4)). As far as it does not overlap the peak at 02.25.2019, more upside can still happen either as a regular impulse or diagonal. Very Interesting scenarios are developing across the Market, knowing where to stand is critical. At this moment, we enter 2020 knowing that cycle from 2009 should be ending. Trading the long side across World Indices needs to come with a little defense in place.
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