Copper often leads other markets. That's why the red metal is called Dr. Copper.
Copper continue to follow our forecast to a tee. Here is an updated weekly chart of Copper with the larger Elliott Wave structure:
Source Elliott Wave Technician
As you can see from the long term Elliott Wave structure, copper topped in 2011, and since then, a large decline has been in progress with a target of USD 1 - USD 1.25 area on the chart. We have labeled the end of the wave down as (a) marked with blue colour on the chart.
If Dr. Copper is rigth a large stock market crash will follow the price collapse of Copper.
When Greece imposes capital controls, the run on Greek banks will already have taken its toll. Deposits have already declined sharply since late last year.
Source ECB, Barclays Research
The Greek banks are replacing these lost deposits with emergency funds (ELA) from the Bank of Greece, who is in turn borrowing from the Eurosystem via Target2. With these banks increasingly dependent on central bank support, valuations are collapsing as the need for more bailouts becomes imminent. This is especially the case when Greece defaults on its bonds which are widely held by Greek banks.
Nearly 70% of Bundesbank's assets are in TARGET2 claims - a half a trillion euro exposure to periphery nations' central banks. What will the Germans do once they realize that a large portion of their central bank's assets could be at risk? A Grexit will reveal the TARGET2 exposure in all its glory !
As Greece imposes currency controls, depositors in other periphery nations are likely to also begin moving capital out of their domestic banking system. Portugal, Spain, and Italy are vulnerable. Such actions will of course end up increasing TARGET2 imbalances further, putting more of Bundesbank's balance sheet at risk.
This is an update to our earlier Elliott Wave analysis of the Greek stock market which has followed our forecast to a tea and declined steadely over the years.
Another substantial decline is coming that will take the market well under the 2012 low. We label the coming waterfall decline as wave 3 of the final wave 5 marked in blue colour.
Technical analysis of the Greek stock market. Source: Elliott Wave Technician
We think that current decline of the Greek stock market in wave "5" could last until June 2016.
As we have said many times before, "This has implications for the Greek banking system. Will a another collapse of the Greek stock market to new record lows put the banks in a similar situation as banks in Cyprus or even worse, and will Greece exit the Euro ?"
Here is an updated chart of the RTSI Index which represent the Russian Stock Market in USD.
Weekly chart of the Russian Trading System Index with technical analysis and Elliott Wave count. Source Elliott Wave Technician
Back in our April 2014 forecast we wrote the following,
"The Russian Bear is back and will soon show his anger in full force. A large wave
"(2)" rally topped early 2011, since then the Russian stockmarket has displayed a number of "1" and "2" waves of different degrees of trend.
Currently a small rally up to the horizontal resistance line marked in red color on the chart is topping.
The next should be a devasting decline in wave "3" of "3", most likely with large price gaps as the stock market of Russia collapse.
The implication of increasing negative social mood will be terrible, expect a more agresive and assertive Russian government, the current conflicts will escalate, chaos, destruction and further economic deterioration will follow.
The economic deterioration will soon hit the core European countries like France and Germany with full force."
Our forecast is playing itself out well so far and is unchanged. We expect the decline to continue in the Russian stock market priced in USD, as well as further deterioration in the core European countries like France, Italy and Germany.