dax daily outlook wed 14 oct last push down below 10090 resistance 1570242015

(Click to enlarge chart)

What happened yesterday

The Germany 30 Index (proxy for the DAX) has broken below the 10050/10030 short-term pivotal support and invalidated the direct rise scenario.

Please click on this link for a recap on our previous daily outlook.

Key elements

• In terms of Elliot Wave, the Index has appeared to be in the midst of undergoing a corrective wave 4 down movement from the 12 October 2015 high @3pm within a bullish impulsive wave structure of a larger degree in place since 29 September 2015 low.
• The expected end (target)  of a typical corrective wave 4 is at the 38%/50% Fibonacci retracement zone from the low of wave 2 (02 October 2015 low @9pm) to the high of wave 3 (12 October 2015 high @3pm) at 9880/9780.
• The 9780 level also corresponds with our latest weekly pivotal support and the lower limit of the ascending channel (in orange) from the 29 September 2015 low.
• The hourly (RSI) oscillator is still capped by its resistances and below the 50% neutrality level. This observation suggests a lack of upside momentum for the Index.

Key levels (1 to 3 days)

Pivot (key resistance): 10090

Support: 9880 & 9780

Next resistance: 10320/10380

Conclusion

Short-term technical elements are advocating for further downside movement. As long as the 10090 daily (short-term) pivotal resistance holds, the Index may see a minor bounce first before a last push down to target the 9880 support with a maximum limit set at the 9780 weekly pivotal.

On the contrary, a rally above the 10090 pivotal resistance is likely to invalidate the “last push down” scenario to see the continuation of the medium-term upside movement to target the 10320/10380 neckline resistance of an impending bullish “Double Bottom” chart formation.

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