The DAX rally is corrective [Video]
The DAX is showing a lower low streak from the November 2021 peak and hence the 4-hour cycle is still calling for further decline. In the short term however, the index ended the cycle from the peak on 03/29/2022 in wave (1) at 12390.95. The inner wave (1) breakout unfolded as a 5-wave Elliott Wave pattern. Down from the peak on 03/29/2022, wave 1 ended at 13380.67 and wave 2 rally ended at 14709.38. The index extended lower in wave 3 towards 13007.91, and the rally in wave 4 ended at 13443.77. The lower wave 5 of the last leg ended at 12390.95 and this wave ended (1) at a higher level.
The wave (2) rally is underway with a split into a double three Elliott Wave structure. Up from wave (1), wave ((a)) ended at 13019.13, and wave ((b)) pullback ended at 12434.29. Expect the index to end the wave ((c)) soon in the 13064.48 – 13452.97 area and this should end the W wave. The index should then pull back into the X wave to correct the cycle from 2022-07-05 to the 3, 7 or 11 swing low before turning higher in the Y wave of (2). In the near term, as long as the pivot at 12392.38 low remains intact, there is room for the index to extend the wave (2) rally to correct the cycle from the 03/29/2022 peak as the 7-swing structure before resuming the decline.