Friday, November 3, 2017

Elliott Wave Structure of the Spanish Stock Market

Here is an extract from our Elliott Wave Technician November 2017 Investment Newsletter.

As a proxy for Europe we publish our Elliott Wave Analysis of the Spanish Stock Market which reveals a triangle structure spanning nearly 20 years.

Monthly chart of the Spanish Stock Market

Technical analysis of the Spanish Stock Market.  Source: Elliott Wave Technician

A long term boom in the Spanish Stock Market ended in 2000. Since then a large contracting triangle has been evolving which we have labeled as Elliott Wave 'B' marked in blue color on the chart.  

The initial large decline down from the top in 2000 into 2002 is labelled as wave “A” marked in blue color. Notice that the ultimate 2012 low was more than 70% lower then the Spanish stockmarket's all time high in 2007.

A rally out of the 2002 bottom in wave “B” marked in blue color is topping.

The Spanish stock market is now entering a large Elliott Wave 'C' decline. The target of the ‘C’ wave down should be well under the low of 2012 and take multi years to play out. We expect the Spanish real estate market to collapse as well.

The implications of collapsing stock- and real estate markets will have dire consequences for the Spanish banking system.

Money and banking restrictions are coming, and like in Greece, expect to wait in long lines outside the banks in order to take out a small amount of your own money.

We expect civil war like conditions in certain regions like Catalonia as the display of negative social mood plays out during the bear market.

A return to the Peseta and an exit from the European Union is likely in the coming years.
Geir Solem

Elliott Wave Technician
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