We are still long term bullish for stocks including the DAX shown here. Last time we analysed the index we had a rising wave overlapping a declining 3 waves affair confirming out long term bullish outlook but we also warned that the bulls might have to face rough sea before sailing higher. The DAX confirmed our suspicions about more weakness with a decline that appears to be the last leg of an expanded flat. A 3-3-5 affair.
Current decline labeled as wave C of an ABC expanded Flat has a nice structure demanding more downside action before completion.
Probably Monday will end wave 3 of 3 and as shown on the chart we would need an up-down-up-down sequence to terminate that storm. Where it will end is more difficult to predict but we do have some potential targets. The first stop might be at the 23.6% retracement at 12500 and not too far at 12350 we have wave C of the Flat would equal 1.618 times wave A a common relationship between waves within a Flat. Then the next support @ 11900 is more appealing as we have the bottom of the previous fourth wave and the 38.2 retracement.
Again, once over, we expect most markets to climb back up in one final wave to end the advance from the 2016 low.
Current decline labeled as wave C of an ABC expanded Flat has a nice structure demanding more downside action before completion.
Probably Monday will end wave 3 of 3 and as shown on the chart we would need an up-down-up-down sequence to terminate that storm. Where it will end is more difficult to predict but we do have some potential targets. The first stop might be at the 23.6% retracement at 12500 and not too far at 12350 we have wave C of the Flat would equal 1.618 times wave A a common relationship between waves within a Flat. Then the next support @ 11900 is more appealing as we have the bottom of the previous fourth wave and the 38.2 retracement.
Again, once over, we expect most markets to climb back up in one final wave to end the advance from the 2016 low.