Elliott Wave view suggests DAX is doing wave 2 correction as a Flat Elliott Wave structure. Rally to 12656.05 on July 4 ended wave 1. Down from there, wave ((a)) ended at 12172.59 as a zigzag. Index then rallied to 12599.93 as a Flat and ended wave ((b)). Wave ((c)) is in progress as a 5 waves impulse. Wave (i) of ((c)) ended at 12299.10, wave (ii) of ((c)) ended at 12473.97, and wave (iii) of ((c)) ended at 12117.28. Expect Index to bounce in wave (iv) then do another leg lower in wave (v) of ((c)) of 2. Index should then resume to new high or bounce in 3 waves at least.
The Index has currently reached the 100% extension in 3 waves from July 4 high. As the minimum target is met, it can bounce and rally any moment. Furthermore, the pullback from July 4 high in DAX can also be counted as a double zigzag which doesn’t require further low. However, looking at the structure of the correlated Eurostoxx where same wave ((b)) made a marginal high above July 4 high, we believe a Flat structure is the better view. We don’t like selling the Index and expect buyers to appear soon for a 3 waves bounce at least.
DAX 1 Hour Elliott Wave Chart
