10 - Crash Sequence & Brexit Volatility vs Wave Patterns
GER30 concluded a drop of approx. 3400 points during 2018, getting heavily hit by the sudden spikes in volatility. The German index ended 2018 displaying approx. 25% decrease in value.
The entire bearish sequence which began in late 2017 has been labeled as the final sequence of a larger degree, labeled as Super-Cycle (Y) (orange). Within this type of sequence, the structures revealed themselves as complex, even extending in their complexity over time due to the conflict between trending degrees. Such complicated structures have been historically known to result in extended apprehension periods, with terrific eruptions.
Cycle W (purple) represents the first sell-off which occurred back in February 2018, and Cycle X (purple) has been classified as the left shoulder in a Head & Shoulders formation. Cycle Y (purple) has been classified as an extended complex structure, unfolding within a Descending Channel. The structure within Cycle Y (purple) could be labeled with a sharp bearish start in Primary A (red), followed by a Descending Triangle in Primary B (red).
During the last quarter of 2018, DAX has been constantly sliding its way down and this swing has been classified as an Ending Diagonal within a Descending Channel. Due to this possibility, DAX could be poised for more weakness ahead unless the index reveals clearer bullish signs.
A final bearish push could occur in Primary C (red), which could reflect Intermediate (5) (blue). Should this swing start unfolding, then it would need to breach the 10550.00 levels in order for the bearish motive structure to be consistent. In this scenario, should the bearish sentiment persist, then GER30 could even tag the 9500.00 levels.
However, there are still chances for the German bull market to return. In this scenario DAX would need to gain support at or around the 10550.00 levels, and should this scenario become a reality, then it would also need to break-out of the Descending Channel. In a bullish scenario, the upper trend-line should be broken on the up-side and then result in a support being granted on it.
DAX could be trading in a range towards the down-side during the 1st quarter of 2019.
Assuming that one more volatility wave would occur, and that the technical analysis shared could be on track, then this would lead towards more possible weakness ahead for GER30. Intermediate (5) (blue) could aspire for the 150-161.8% Fibonacci Extensions of Intermediates (1) & (2) (blue), which align with the Fibonacci Extensions of Intermediates (3) & (4) (blue).
As for a Market Crash sequence, the 9000.00 and 8600.00 levels would be in focus.
The entire bearish sequence which began in late 2017 has been labeled as the final sequence of a larger degree, labeled as Super-Cycle (Y) (orange). Within this type of sequence, the structures revealed themselves as complex, even extending in their complexity over time due to the conflict between trending degrees. Such complicated structures have been historically known to result in extended apprehension periods, with terrific eruptions.
Cycle W (purple) represents the first sell-off which occurred back in February 2018, and Cycle X (purple) has been classified as the left shoulder in a Head & Shoulders formation. Cycle Y (purple) has been classified as an extended complex structure, unfolding within a Descending Channel. The structure within Cycle Y (purple) could be labeled with a sharp bearish start in Primary A (red), followed by a Descending Triangle in Primary B (red).
During the last quarter of 2018, DAX has been constantly sliding its way down and this swing has been classified as an Ending Diagonal within a Descending Channel. Due to this possibility, DAX could be poised for more weakness ahead unless the index reveals clearer bullish signs.
A final bearish push could occur in Primary C (red), which could reflect Intermediate (5) (blue). Should this swing start unfolding, then it would need to breach the 10550.00 levels in order for the bearish motive structure to be consistent. In this scenario, should the bearish sentiment persist, then GER30 could even tag the 9500.00 levels.
However, there are still chances for the German bull market to return. In this scenario DAX would need to gain support at or around the 10550.00 levels, and should this scenario become a reality, then it would also need to break-out of the Descending Channel. In a bullish scenario, the upper trend-line should be broken on the up-side and then result in a support being granted on it.
DAX could be trading in a range towards the down-side during the 1st quarter of 2019.
Assuming that one more volatility wave would occur, and that the technical analysis shared could be on track, then this would lead towards more possible weakness ahead for GER30. Intermediate (5) (blue) could aspire for the 150-161.8% Fibonacci Extensions of Intermediates (1) & (2) (blue), which align with the Fibonacci Extensions of Intermediates (3) & (4) (blue).
As for a Market Crash sequence, the 9000.00 and 8600.00 levels would be in focus.
