Some indices reversed already, whereas others probably need another swing up until liquidity dries up. The most likely cohort for the DAX is within the second camp. Nonetheless, there is a non-negligible potential that a top has been struck on July 21st. The red scenario shows this possibility.
Notably, the leg up from mid-May into early June is a 3-wave pattern. It was followed by a swift correction that had an impulsive character. The subsequent leg up exceeded the mid-June high in a choppy manner. Hence, some form of weak upside drift was likely. It is either part of an ending diagonal or a fourth triangle wave that was followed by an already complete 5th wave ending diagonal. Black shows an ending diagonal pattern within a C-wave of intermediate degree that has some more room to the upside into mid-August. An immediate upside reversal is necessary for the black scenario. Alternatively, another downside spike targets the 12,000 S/R and morphs the weakness since July 21st into a bearish impulse. The red count shows how the DAX could have topped already within an unclean EW pattern.
All in all, the main message has not changed. Equities are not bullish right here despite buying some more time at elevated levels. A sustained break below 12,400 implies a trend reversal.
Notably, the leg up from mid-May into early June is a 3-wave pattern. It was followed by a swift correction that had an impulsive character. The subsequent leg up exceeded the mid-June high in a choppy manner. Hence, some form of weak upside drift was likely. It is either part of an ending diagonal or a fourth triangle wave that was followed by an already complete 5th wave ending diagonal. Black shows an ending diagonal pattern within a C-wave of intermediate degree that has some more room to the upside into mid-August. An immediate upside reversal is necessary for the black scenario. Alternatively, another downside spike targets the 12,000 S/R and morphs the weakness since July 21st into a bearish impulse. The red count shows how the DAX could have topped already within an unclean EW pattern.
All in all, the main message has not changed. Equities are not bullish right here despite buying some more time at elevated levels. A sustained break below 12,400 implies a trend reversal.