In my last post on the DAX 30 Index on 7th January 2016, I warned of further short-term downside from 9’980 to 9’350 (read full post here). The timing was more than right as DAX 30 then slit over 600 points and made a new 1 year low at 9314.
Following a rebound attempt to 10’000, DAX 30 failed to complete an intermediate bottom and meanwhile dropped 10% within just two weeks to 8’980. Despite the new lows and higher volume, the final sell-off is still ahead of us.
It seems DAX 30 is within its final wave 5 of a minor impulsive wave. Given that fact, the 3rd wave extension and the fibonacci equality ratio extension, I reckon an intermediate bottom will be found at around 8’780. This suggests of another 200 points drop from here (-2.20%) with excessive volume. So it’s gonna be short, but painful.
On the intermarket side, further short-term upside in EURUSD to 1.14, its trend-channel resistance line, seems likely and would be align with the DAX 30 roadmap.
Conclusion: Too early to pick bottom in DAX 30 Index, final and strong sell-off to 8’780 still ahead. EURUSD, buy into new lows with target 1.14.