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DAX – Long-Term Wave Analysis

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During this year, the DAX futures (EUREX:FDAX) gained 10.69% (YTD). In this post, we’ll review what to expect from FDAX for the following weeks.

 

The big picture

The FDAX (log-scale) monthly chart shows a bullish process of a Cycle degree that began in January 1991 when the price found buyers at 1,310 pts. From the current wave 5 of Cycle degree, we observe that the structure still is in progress. The motive sequence of wave 5 of cycle degree, indicates the completion of a wave 3 of Primary degree when FDAX reached the 13,596 pts. In consequence, the German index should be running in a wave 4 of primary degree.

In view that FDAX is running in a wave 4, we should remember the EW’s rule that says “wave four doesn’t overlap to wave one”. Therefore, the lowest level that wave 4 could fall FDAX is the area of 8,253 pts, which corresponds to the highest level reached on December 27, 2008.


Once completed this move, we foresee a new rally which could strike the region between 14,000 and 15,300 pts.

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