This August has brought very volatile market conditions. The sell off didn't surprise me as you can see in my previous post, I couldn't rule out a bigger drop (dax ld+flat). This flat can be drawn a little more complex, but I think it doesn't really matter. At that time the market was in an absolute 50-50 situation in my reading. After this the market first moved upward but failed to pierce through the critical level needed to trigger the continuation of an immediate long trend.
I decided to update the context because the drop so far doesn't look like an impulse wave. I can't exclude a 1-2-[i]-[ii] situation though, but right now this drop looks corrective.
If you take a look at the monthly chart, you can see the drop stopped at multiple support zones. The 38.2 Fibonacci level, the upper line of the base channel and the previous wave (IV) zone was right there. We saw the first break below the trend line created by the RSI and the momentum came down to the bullish support zone. This movement is pretty much equal in points and time with the possible wave II (see boxes). So if the market wants another high or test of the high this is the place for it. Just a thought on what if the market takes out the low (and especially if it closes below that level on weekly of monthly chart). then I think a trend reversal is most likely and at least a bigger correction should develop with the target level of 8500 as the end of wave 3 of (A).
|DAX (CFD) monthly chart|
|DAX (CFD) weekly chart|
|DAX (CFD) daily chart|
|DAX (CFD) 4 hours chart|
|DAX (CFD) 5 minutes chart|