German dax unfolded an EW ending diagonal within a bigger wave, which seems to have found a low at the 10280 level, from where a nice rally is now developing. This rally can be labelled as wave 1, first wave of a bigger upcoming cycle that is expected to unravel five minor legs. At the moment we see a temporary pullback unfolding as part of wave 1, which can face support and a recovery near the 10782 level.
An ending diagonal needs an overlap in waves 1 an 4 to be valid. It's mandatory. This is not an ED.
ew-forecast
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@EW-FAN, not maybe a perfect ending diagonal but it was still a wedge that suggested a turn. However, in book by Frost and Precheter page its the follow:
-diagonal triangles are the only five-wave structures in the direction of the main trend within which wave four almost always moves into the price territory. Notice the wording "almost always" which is not the same as always.
-pic 1-18 in the book has no overlaps.
But the main point is not to be right with all of the pieces within the price move. Counting everything into perfection is "pain in the ass" sometimes. so its important that we are flexible, but still not breaking the rules. we have to look at markets from distance.
Lets keep in mind that the idea of the EW is that you find and recognize the personality of the move, and find out the next direction even with different wave counts and interpretations. I agree, the price move of DAX above can be labeled differently as well into that low, but I highlighted that pattern because even to basic analysis may play an important role and brings attention to other, non-EW traders.