DAX Has Resumed Lower Towards 10000 Levels

4 August 2020

DAX might have resumed its larger degree Wave (3) lower towards 10000 and 8000 levels respectively. Unlike the US indices Dow Jones, SPX500 and NASDAQ, the European Indices have resumed lower into their respective Wave (3) towards March 2020 lows.

DAX probable wave counts are as follows: The indice had earlier dropped between 13800 through 8200 clearly sub dividing into 5 waves, making an impulse drop. It has been marked as Wave (1) of a higher degree.

Ideally, it an impulse drop should be followed by a corrective rally. DAX also produced a corrective wave towards 13300 levels. The corrective wave has been labelled as A-B-C, terminating as Wave (2) of a similar degree.

If the above structure holds true, DAX should remain below 13300 levels and proceed towards 10000 and 8000 going forward. Also note that the indice has broken below its counter trend line support and entered the sell zone.

The indice might test 12800 levels before resuming lower towards 10000 and 8000 respectively. Immediate resistance is seen towards 13300 levels, while support is towards 12000 and 11600 respectively.

Also note that the counter trend had rallied through the fibonacci 0.88 retracement levels of Wave (1) around 13300. DAX would remain bearish until prices stay below 13300 levels going forward. A break above 13800 would be required to change the above bearish structure.

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