Friday, October 10, 2014

DAX Germany Weekly Chart H&S Pattern Correction Territory Down -13%

The DAX is down as much as -2.4% this morning (the red dot this chart is one day behind). The dark red lines show the negative divergence spankdown to begin July. The indicators are mixed now with stochastics and histogram open to a near-term bounce for a week or two but the MACD line and ROC continue lower wanting to see lower lows in price after any dead-cat bounce occurs.

The red lines show a head and shoulders (H&S) pattern in play and price lost the 9K baseline neck line this morning printing down at 8788. The head at 10000 and neck at 9000 makes the math easy. The downside target is 8000 if the 9K ruptures which it did today. A back kiss will be needed for the 9K going forward. Support levels of interest are 8700, 8500, and 8400 (purple lines). The 20-week MA crossing down through the 50-week MA would be a very bearish development. Watch for the MACD lines to cross to indicate a sustainable upside rally.

Three months ago, the wine was flowing like water with DAX at 10060 but dropping to 8790 this morning, 1270 points lower, -13%, handily in correction territory (-10% down). A bear market is -20%. Price will need to bounce and back test the 9K level at some point forward. The 8K downside H&S target remains in play going forward. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

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