If SPX is a jumbo jet, DAX is a fighter jet.
Can go faster but is subject to larger "air pockets".
Before the correction started, when it was still unclear if it was going to let go, I calibrated the likely correction on the expected move in SPX (which are generally of about 10%).
But a simple analysis shows that large degree corrections on the DAX are more often in the 15%.
- The move up from oct14 was 48% (rather quick).
- The market wanted to catch up with move and is probably loaded at uncomfortable levels.
- 10,500 would be roughly 61% of the move from Dec14 and 50% of the move from Oct14.
- The US did not start their correction - It is rather likely they will correct 10% without completing their last potential move (Absurd Reasoning Reverse Engineering). If the EU/US correction is in sync from here, that would bring DAX close to the 10,500.
There are many scenarios, this is one is an extreme one, a possible one that is in line with past behaviors.