The DAX sure looks like it just printed a textbook impulse wave down from its recent high. Well divided and it stopped right at previous chart congestion or a previous fourth wave. A common occurrence. From yesterday bottom expect a rally that has a strong resistance in the 13175-13190 range. A previous fourth wave and the 38.2 retracement. But I won't be surprised if the counter trend rally try to go higher. Markets have been in a uptrend for quite a while and the bulls won't quit that easy.
Once over expect the DAX to resume its decline in an another wave that I am not sure if it will be wave C of a simple ZigZag or a third wave part of a larger impulse wave down that would indicate a much larger correction that would last many weeks. We will keep the chart updated each time market action warrants it.
The bottom line is for now we don't want be bullish on the DAX ( and actually for that matter, any other indices ).Let's watch the show from the sideline. It will tell us when to get back in.
For those interested, if we are right and the market will consolidated from here AND not make new high, that will give you a Head & Shoulder pattern which has the same implication as the Elliot pattern. At least another leg down in the horizon.
Obviously making new higher from here will negate that analysis but not our belief we are consolidating from current level.
Once over expect the DAX to resume its decline in an another wave that I am not sure if it will be wave C of a simple ZigZag or a third wave part of a larger impulse wave down that would indicate a much larger correction that would last many weeks. We will keep the chart updated each time market action warrants it.
The bottom line is for now we don't want be bullish on the DAX ( and actually for that matter, any other indices ).Let's watch the show from the sideline. It will tell us when to get back in.
For those interested, if we are right and the market will consolidated from here AND not make new high, that will give you a Head & Shoulder pattern which has the same implication as the Elliot pattern. At least another leg down in the horizon.
Obviously making new higher from here will negate that analysis but not our belief we are consolidating from current level.
