Some very significant developments may be underway in the Greek stock market. I commented on Greece and other European markets in January 2015. At that time, I considered Greece’s ASE index to be in a bear market that would need to take out its 2012 low before bottoming out.
The ASE index has now done so, and it appears that a massive Elliott Wave bear market pattern (that began in 1999) may have concluded in February of this year.
ASE index chart from tradingeconomics.com – labeling mine
The chart has a clear 3-wave zigzag pattern, with the C-wave subdividing into five waves as would be expected.
I think the bottom is real. At the February low, the index was down 93% from its 1999 peak. It is really hard to image what could not have been priced in by a drop of that magnitude. During America’s great depression, the stock market bottomed out after a decline of ~90%.
In Greece’s stock market this year, what started as a rally that could have been just a bear market rally seems to have developed legs after consolidating in March-April then breaking out to the upside.
This rally is definitely something to keep an eye on. If the Greek stock market has bottomed out, I would expect the economy to start recovering within the next 6-12 months. Economic growth would help prevent recurring debt crises in Greece, which would take a significant burden off the Eurozone economy and allow other European countries to return to healthier growth rates, leading to greater stability in financial markets globally.