Stock Market Outlook

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· Opposing indications persist, but I think SPX may try to press somewhat higher, before going to a new low.

· It will be a tough week for ST traders with the usual FED day whipsaws.

· Keep in mind the typical beginning of the month positive seasonality due to the inflows of pension funds.

· It is still a good strategy to raise cash on the rips.

· My intermediate- and long-term views have not changed.

Market data as of close on 29 Apr. 2024.

German Economy

· The German economy was in trouble the last two years, but it looks like it may have had a growth in Q1’24.

· It appears that the prospects for the German economy prospect, the business climate index, are improving in 2024.

Let’s employ our technical analysis techniques, EWT, and cycles, to get clues about the direction of the German stock market and economy.

German Market ETF (EWG) - EW Count

· What does the German market proxy, EWG, tell about the German economy?

· Looks like in 2023 investors anticipated potential improvements in 2024!

· My Elliott Wave (EW) primary count suggests that the path for EWG is down for the next 12 months or so. Does that mean the German economy will get worse in 2025?

· Although the EWG could still potentially push to the A=C level, it turned down at exactly 78.6% of the Fibonacci retrace of (A), which is normal-to-high for wave (B). Also, C=0.618*A is one of the typical wave relationships.

· Thus, although higher is still possible, I am happy with the price level for (B).

· The key point is, higher or not, that the wave structure from the Oct’22 low looks corrective, IMO.

EWG Cycles

· The 3.5Y cycle in EWG is still pressing higher.

· The chart below depicts the weekly chart cycle composite, including four most reliable detected cycles: 67W, 99W, 3.5Y and 7Y.

· It seems that longer cycles allow still higher for EWG into early 2025 or so.

· My Hurst cycle analysis of the 4h EG chart is below.

· EWG is hitting the center of gravity of the estimated peaks for the 80D, 20W, and 40W cycles. The next trough for the 40W cycle is in early 2025.

· It is difficult to say whether the overall cycle peak will be driven by these intermediate-term cycles or the longer ones in the chart above. Perhaps somewhere in between is also possible.

· But the overall sense is that EWG should decline, sooner or later.

There were no noticeable changes in dynamic cycles compared to yesterday. This is not surprising.

There is still a down bias due to shorter cycles for the next . .

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