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I suggested the index must hold above 9637 in order to trigger the next phase of upside momentum. It failed dismally in the event, and now stands some 519 points lower.
In earlier updates, I had suggested the ideal buying scenario on the DAX would be if the index fell to the same band that formed my previous long-term target. This band is defined as 8942-8972, and the suggestion was that this level could be relied on to provide downside support too. A fall of this magnitude would also complete an 8.33% pullback from the recent all-time high. It took some time to unfold, but the intraday low of 8913 on 14 March has now completed this ideal scenario.
We now have a line in the sand. A failure to hold above 8900 will provide the trigger for the DAX to test much lower levels. If 8900 were to give way, a doubling of the initial fall of 8.33% (to one of 16.66%) would take the index down to 8101.
Recommendation: neutral. The next trading opportunity will be the first of the following scenarios to evolve. Sell the index short on a break below 8900; the target then becomes 8101. Alternatively, buy the index on a break above 9655; the target then becomes 10,250.