DAX Short-Term EWP Update

By: TheWaveTrading | Wed, Aug 29, 2012
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Today is the last chance in order to get a deeper retracement, if my short-term scenario, which I have been discussing for SPX, is going to play out.

It is obvious that the market is in a state of "limbo", with huge expectations, waiting for Bernanke`s speech next Friday. But, in my opinion the real price mover will be the ECB meeting next Thursday.

As a reminder my preferred scenario calls for a corrective wave (B) off the June 4 low that is tracing a Triple Zig Zag.

Since both the last up leg off the August 2 higher low and the current pullback is corrective I believe that the TZZ is not over yet as it need the last wave (C) up.

This scenario that I have been discussing for SPX can also be applied in the case of the DAX. (I use the future contract for this analysis).

DAX Futures
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In my opinion If price is now unfolding a Zig Zag down in order to establish the bottom of the assumed wave (B), it should be larger.

Hence the range of the 0.382 - 0.5 retracement should come into play.

In addition even though, lately, bearish set ups have to be taken with a grain of salt, there is a potential H&S, which, if its target is fulfilled, price could reach the 50 d - Trend Line off the June lows.

Today is probably the last chance for the bears to attempt to trigger sell stops below 6885.50 (the neckline of the assumed H&S).

 


 

TheWaveTrading

Author: TheWaveTrading

TheWaveTrading

Contact: If you would like to contact the author, you can e-mail him at thewavetrading@gmail.com

The main objective of this project is to share my views on several markets and asset classes.

In the initial stage TWT website will be a free service.

My main focus will be the equity market with SPX being the leader but I will also follow US equity sectors, major European indices, fixed income, currencies and commodities markets.

My analysis is based upon traditional Technical Analysis, Elliot Wave guidelines and investor sentiment.

My goal is to establish the most likely path that the price of a particular asset will undertake and profit through ETF instruments both on the long and short side and mainly with leveraged ones (2 x & 3 x).

The advantage of ETF investments is that it allows getting involved in equity indices & sectors, currencies, fixed income, commodities etc.

Therefore the main purpose of TWT will be to establish investment strategies regardless if the market is in an up trend or in a down trend, leveraging the chosen scenario while managing the risk by establishing protective stop losses.

Hence I will always define the risk, I will try to let winners run the wave and I will cut the losses if my strategy is wrong.

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