Elliott wave analysis of the German Dax Index

German DAX

CJ asked if I would take a look at the German DAX and give my short term view, which I of cause will be happy to do.

But before taking a look at the short term, I think it's important to know where we are in the bigger picture. I think that a major wave 4 triangle is developing. We most likely have just ended wave D or is very close to end wave D and see a major decline in wave E towards 5,905 at least and possibly even lower towards 5,000.

Short term a break below 7,530 will be the first good indication, that wave D is in place already and that wave E lower has begun, while a break below 6,955 will confirm that Wave E is indeed unfolding. However, as long as support at 7,530 has not been broken we couls still see a firm test of strong resistance at 8,141

Looking at the Equity markets World wide I think it would be prudent to ease the risk appetite or at least set levels, where the exposure will be eased dramatically.

Elliott wave analysis of the German DAX Index

German DAX Index

CJ asked me if I would take a look at the German Dax.

Here is my count for the German DAX. As can be seen I regard the entire price-action since the 2007 high at 8,151.57 as corrective. The high we have just seen at 7,871.79 is in my view wave b of an expanding flat correction, which began at 7,441.82, that means we should be looking for a powerful c-wave decline to below 4,965.80.

CJ also asked if I think a top is in place at 7,871.79 and I do think it's the case. The decline from the 7,871.79 does look impulsive in character, meaning that the decline is in five wave down. Short term I would look for a slight recovery towards 7,694.42, which marks the top of wave iv of one lessor degree and at the same time marks the 50% correction target of the decline from 7,871.79 to 7,537.29. Once wave ii is over we should see a powerful decline in wave iii down to 7,166 as a minimum.