Although that recommendation required a drop of nearly 300 points for the DAX, in the event it proved too conservative. Today I will review the likely downside targets.
In arriving at the 9444 level, I had assumed a degree of support would emerge following a 4.165% fall from the recent high. Instead the DAX tumbled by 6.25%, the next line in the sequence of Gann-theory percentages. This at least clarifies some of the unknown, and provides better parameters going forward. The 6.25% line is isolated, however, as you can see on today’s updated chart. A better scenario would be a slip of 8.33%, where a cluster of percentages form a tight band, taking the DAX back to revisit my long-term target at 8972. It would also synchronise the index with the falls I’m expecting on the Dow, the S&P 500 and the FTSE 100.
Given this heightened risk, I recommend closing long trades. A further fall to 8972 would provide the perfect opportunity to go ‘long’.
Recommendation: neutral. Buy the index on any fall to 8972.