DAX: Update of the Long Term EWP
This is a brief update, I don't have much time to extend a long discussion, instead I will rely on the charts in order to show a potential path.
I will use as the preferred count the same one I am working with for SPX = Double Zig Zag wave (X) although in the case of the DAX the wave (W) bottomed much higher than the preceding wave (A), similar to a running flat corrective pattern.
Therefore like SPX, the DAX from the March 09 lows is unfolding a countertrend (corrective) wave (X). Once the wave (X) is in place, provided price does not substantially breach the 2007 top, the next directional move should be to the down side towards the March 09 lows.
In the weekly chart below I show a potential Double Zig Zag for the wave (X). This count in my opinion is consistent with the ovearall internal structure, above all for the sequence from the March 09 low - July 07 high = First Zig Zag.
But so far it is not clear yet if price is unfolding another Ending Diagonal in order to complete the second Zig Zag.
Nonetheless the negative divergence of the weekly RSI (it remains below its September peak) and an overbought weekly Stochastic are suggesting that price could be involved in an ending pattern.
Going forward I will begin to follow the pattern and post every so often the short-term EWP.