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.
Good morning, This is VERY NICE PROFESSIONAL AND SMOOTH Analysis .. I love it as I have just planned almost the same as considered first landing as (a) then expanded TA started and now we are in the process of (C) of wave 4 , however I feel all of this complex correction is a matter of W only.. please check and try consider or advise your professional view..
I thank you very much for this lovely great efforts and would wait for your comments and best advise,
Please accept my very best regards,
Ahmed
yauger
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@ahmedhamdan, It will depend what the crowd does with the DOW. So far we have 3 waves down from recent high. If we keep moving lower to built a 5 waves affair that would imply that at minimum we will see an ABC down in the DOW. If it turns out that way, it would hard to think the DAX will start a rally while the DOW goes down. Thus, yes it is possible that my ABC expanded Flat for the DAX is only the first block ( wave W ) of a larger more complex 4th wave.