DAX30 – Stock Exchange Crash – Full Cycle:

DAX30 indeed delivered the Bearish Correction which started exactly at the 12950.00 Levels, as stated in the previous post: GER30-DAX – SELL Set-Ups – Stock Exchange Crash.
We decided to make a full review on DAX30 and post an updated Analysis because we do not agree overall with Cycle Wave III (green) being the shortest wave or overlapping with Cycle Wave I (green).
LEWA decided not to accept this Rule Violation. Therefore, we are looking at the Bullish Structure as if Cycle Wave III (green) is not yet complete. In fact, Cycle Wave III (green) shows an Extension in its Primary (blue) sub-waves.

DAX30 – Stock Exchange Crash – When, How and Why?

According to the Analysis below DAX30 very much looks like it is trading within an ABC Grand Super-Cycle (pink) and possibly finalize the last 3 pieces of the puzzle for Super-Cycle Wave (V) (black) to complete the Bull Market.

Before you get to see my charts allow me to tell you this:

‘’I know how complicated it might look but believe me it’s not, just follow my lead and you’ll see.”

DAX30 – Monthly Chart:

These are interesting times we are living and here at Lionheart Elliott Wave Analysis, we believe that the Bull Market for DAX30 is coming to an end. Therefore, we will be looking in the near future for clearer signs of a Market Crash.
The main focus for possible triggers are on China debt, US Housing, World-Wide Central Banks (negative interest rates) and possible Geo-Political Events.

Why DAX30 and not SPX?

We chose this EU Index for certain reasons, mostly because of how the next Market Crash will affect the EU Banking System and because it can offer a deeper move and a better gain.

Freestyle:

Remember this: negative Interest Rates are not designed for a healthy economy and sustained growth, it is mostly a ‘’game’’ well played by ‘’fast money’’ people.

Allow me to explain:

2007-2008 was felt and the Housing Market collapsed leading towards a chain reaction world-wide. Guess what? That was just a small piece of the entire picture. After that the FED’s moved their views and dropped the Interest Rates so that they can ‘’sustain the hit and survive’’, but what many don’t know is that as soon as Interest Rates rise again along with Housing Index, then World-Wide Banks follow. This leads towards a Housing Bubble making low rates house buyers sit in a tight spot, not able to handle the situation. In other words the low rates causes Banks to lend credits like it’s no tomorrow but when it comes to payments on higher rates, well, sorry.

So why are rates heading higher now? Ha! Think you get the picture, it’s a ‘’fast money’’ scheme. You know, being one of the ‘’world owners’’ comes with benefits, you can get in when it drops and you get to be ‘’invisible’’.

Time-Line Speculation and Projections?

According to Time Cycles, these swings would take around 1 year to complete.
We are looking forward to Oct-Nov 2017 for the first signs and then in the middle of 2018 we will be closely watching the charts.

DAX30 – Full Cycle – Elliott Wave Analysis:

Within Grand Super-Cycle Wave C (pink), Super-Cycle (V) (black) would still need to complete the current Corrective Structure for Primary 4 (blue) and afterwards a Bullish Impulse for Primary 5 (blue), therefore, completing Cycle III (green).
As per the Optimism-Skepticism phenomenon within Dow Theory, Elliott Wave and Cycles, Cycle Wave IV (green) would be seen as a Major Sell-Off and a possible trigger for what’s later to come.
A Market Shift is already visible on EUR/USD, as per the ‘’ EURO/DOLLAR-EUR/USD – Descending Bearish Channel – Elliott Wave Cycle “ post.

EUR/USD – Correlation – Levels in Focus – 1.18500 & 1.19500

DAX30 – Wave Count Break-Down:

Cycle III (green) Analysis:

• Cycle Wave I (green) moved with its Bullish Impulses until 50% Fibonacci Retracements of Super-Cycle IV (black).
• Cycle Wave II (green) has shown a Deep Corrective Structure under an Expanded Flat form, with a Running Flat Structure inside its Primary B (red) sub-wave.
• Cycle Wave III (green) started the Bullish Cycle with Primary 1 (blue), followed by a deep Bearish and Complex Corrective WXY (red) Intermediate.

Due to the fact that this Correction is overlapping with Cycle Wave I (green), it is excluded to think that Primary 1 (blue) can act as a Cycle Wave III (green).

Here’s why:

• According to one of the main Elliott Wave Rules and R.N. Elliot’s Legacy, Cycle Wave IV (green) (which in this case it would replace Primary 2 (blue)), would be entering Cycle Wave I (green) territory and would act as a Wave Count Violation.
• Cycle Wave III (green) would act as the shortest wave, with limited power, violating and trying to bend another main Elliott Wave Rule.

Conclusion:

• Cycle Wave III (green) presents an Extension in its Primary (blue) Sequence, also pointing out a Major Rally and Extension in Primary 3 (blue), with the Intermediate (orange) sub-waves unfolding within a Bullish Channel.

Let’s continue with the Wave Count!

• Primary 2 (blue) retraced as an Expanded Flat, with a 50% Fibonacci Retracement of Primary 1 (blue) which is quite common for this Index.
• Primary 3 (blue) presents an extension in Intermediate (3) (orange), as pointed out by the 161.8 % Fibonacci Extensions of Intermediates (1) & (2) (orange).
• Intermediate (5) (orange) ends the Bullish rally with a Bearish Divergence at the 100% Fibonacci Extensions of Intermediates (3) & (4) (orange).
• Intermediate (5) (orange) presents an Extension in Minor 1 (blue), with the next Impulses Minors 3 & 5 (blue) completing at the 100% Fibonacci Extensions of Minors 1 & 2 (blue).

Cycle Wave III (green) Analysis:
Fibonacci Extensions & Levels in Focus:

The Levels in Focus for the end of the Cycle Wave III (green) are 13300.00 and here is why:

• 61.8% Fibonacci Extensions of Super-Cycle Waves (III) & (IV) (black), Target for Cycle III (green).
• 227.20% Major Fibonacci Extensions of Cycle Waves I & II (green), Target for Cycle III (green).
• 200% Fibonacci Extensions of Primary Waves 1 & 2 (blue), Target for Primary 5 (blue).
• 61.8% Fibonacci Extensions of Primary Waves 3 & 4 (blue), Target for Primary 5 (blue).

Primary 4 (blue) – Speculation & Projections:

Levels in Focus for the possible end of the current unfolding wave Primary 4 (blue) are:

• Range of 12000.00 & 11900.00
  100% Fibonacci Extensions of Intermediate Corrective Waves (A) & (B) (red).

• 11650.00
  150-161.8% Fibonacci Extensions of Intermediate Corrective Waves (A) & (B) (red), if Intermediate (C) should have an Extension.
  If such Scenario would occur, one would look for a Breach of Pitchfork & the Channel’s Lower Trend-Line and then a possible Flag Formation.

DAX30 – Daily Chart:


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DAX30 – BUY Set-Ups & Positions – Primary 5 (blue) & Cycle III (green):

Entry Levels:

• Aggressive – 12000.00 and/or 11900.00
  SL – 11400.00
  Target (TP) – 13300.00

• Moderate – 11650.00
  SL – 11000.00
  Target (TP) – 13300.00

• Conservative – 11500.00
  SL – 11000.00
  Target (TP) – 13300.00

DAX30 – SELL Set-Ups & Positions – Cycle IV (green):

Entry Level:

• 13300.00
  SL – 14000.00
  Target (TP) – 11500.00

* To be noted that Levels could change and new measurements would occur once Price Action unfolds.

Safety Measures:

• When in the green, the SL could be moved to break-even or in profit.
• If Conservative, one would wait for a reaction at the Channel Base Line, look for a Breach and then a Flag which could confirm the Conservative Levels.

Many pips ahead!

P.S. Possible Level for Stock Exchange Crash – 14400.00
End of Super-Cycle Wave (V) (black).

• To be continued…