Updates on Disney, Europe, and China (10/12/2015)

Disney

In August, I wrote that I was expecting Disney’s stock price to drop to $75. Such a drop would have represented a return to the last significant low (October 2014), and would have roughly matched the magnitude of the 2011 drop.

However, after hitting a low of $90 on Aug. 24, DIS has followed the trajectory of the broad market indices. Given that the major indices all appear to have bottomed out, I think DIS has probably also bottomed out.

Here’s my current Elliott Wave chart for Disney
DIS October 2015

As for how high Disney will go, I do not have any good clues from technical analysis. Those who are more fundamentals-oriented are in a better position to answer that question.

Europe

In January, I wrote that I expected European stock markets to have a severe correction this year. I think that correction has happened as many European indices fell ~20% from their peaks earlier in the year. Given the sharp rallies recently, I think that the FTSE (U.K.), CAC-40 (France), DAX (Germany), and IBEX 35 (Spain) have resumed their long term bull markets.

In January, I thought that Italy’s FTSE MIB index was still in a bear market. However, during the most recent correction, the MIB did not get hit any harder than the other major European indicies. Thus, the MIB may be in a bull market after all, but I would like to see a new high with subsequent strength before getting too confident about that.

I think that Greece’s ASE index is still in a bear market that will continue until it takes out its 2012 low around 500.

China

I last commented on China in August. I think that China is still in a bear market given that the current rally on the SSEC looks very weak.

Shanghai October 2015

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