With European equity indices having another deep red open, I believe we are close to the completion of the downward correction of the rally that started last September-October.
DAX could see 78.6% Fibonacci retracement but the 3 wave downward corrective form is very clear.
DAX is approaching the trend line that produced the October rally. Critical weekly support there.
Testing the long-term weekly bullish channel.
The triangle scenario for now remains the dominant one.
New highs will only be seen if we manage to break above the red trend line resistance. Breaking below the green trend line support will increase the chances of re-testing the August lows near 1860.
Short-term trend is bearish with a strong downward momentum across all major indices. Mentality is very bearish. I expect this to change as indices approach their critical support levels. This by no means I’m fully bullish now. I have small long positions and will be looking to increase them only if I see signs that my scenario is coming true.
As always, thank you for taking the time to read my thoughts.