Saturday, January 9, 2016

DAX Germany Weekly Chart Under 10K Corrrection Territory Long Term Sideways Triangle

DAX peaked at 12400 in April 2015, nine months ago, and fell into correction territory, -10% off the  top, at 11160, in August last year. The DAX then recovered to the 11320-ish top in November. A -10% correction from there is 10188 so price is clearly under and the DAX is back in correction territory. The DAX also loses the psychological 10K level and collapses through the 9.9K level.

The Williams (green circles) is oversold so a bounce is likely very near but overall the indicators are weak and bleak and lower lows in price would be expected after any bounce in this weekly time frame.

The blue sideways triangle is very interesting. If this pattern continues to develop in early 2016, the apex of the triangle ends at April-June. The price move from the triangle will have epic and dramatic effects since the vertical side of the triangle is 4000 to 5000 points. At some point over the next four months, price is either going to bust out higher say above the 10.7K-11.2K level, or, collapse from the 9.8K-10.0K level (a bounce is expected in the near-term). Applying the magnitude of a potential move, by the end of this year, the DAX is either going to be up above 15K, or, below 6K; the direction will be known this spring. A collapse below the blue trend line now would place the bear path immediately in play. 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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