European Equities Approaching Critical Junction
ESI Analytics Limited | Aug 13, 2018 04:25AM ET
Showtime approaching for Europe! Major indices have been selling off all across Europe. Germany was no exception. Price action took the DAX index near the contracting triangle support. The DAX could break below that support and extend the c-wave within a triangle (depicted in red). However, that's not required as the entire triangle may complete within the next few trading days (depicted in black). If our analysis is correct, we are a few days away before a rally starts, which extends the entire cycle a bit further to the upside.
The pale green trend channel is likely to guide us whether we are correct with our analysis or not. A clear break of that trend should occur soon if the cycle ended in May 2018 already. We may get an early alert from the French CAC 40 if European indices reached their cycle high in May. The French are closer to their respective mid-term trend support.
We are still favoring the black scenario slightly over the red. We expect to see another extension to the upside for German equities.
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