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German Dax: Temporary Correction Within Uptrend-Elliott Wave Forecast

German DAX futures are in bullish move since start of September, showing an impulsive price action. Impulse is a five wave pattern so we expect more upside as current decline from the highs appears to be a fourth wave, a temporary contra-trend movement. For now, we don't see a completed pull-back yet, but market could find a support around 8510-8570 region where we see an open gap. Those gaps could react as a reversal, in our case as a support in wave 4 for a reversal up into wave 5. Targets for wave 5 are around 8860 where we see a 200% extension of a previous decline from 0845 to 8090 in August.

Basically those fourth waves are pull-backs that could represent an opportunity to join the larger trend. However, if you are looking for any set-ups after wave four retracement its important to know some rules of the Elliott Wave principle. One of the most important rule is that wave 4 must never retrace back to the area of a wave 1. In our case this comes in at 8279, so as long market is above this level bullish view remains valid.

German DAX 4h Elliott Wave Analysis

(click to enlarge)Click to enlarge

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