For those that are interested in the EW application to the DAX, here are the main 3 possibilities that I can see at this time;
The first (blue) is the bullish scenario. It does not rhyme very well with any other market and seems to contradict the “big” picture. Also wave c in a triangle is usually the most complex one which is not the case. The next bearish scenario (green) is that the triangle actually does exist but is preceded by an a-b-c wave A, suggesting that a large flat is in the making. This scenario is bearish but not dramatically so, as once the flat is finished not far from the recent lows the next big move is higher. This triangle still needs at least a d and e wave so there will be a few more months of essentially sideways movement. Ultimately the correction will last to mid 2011 before the bear market reasserts itself. The last (purple) scenario is the real bearish outlook. Next big wave should be wave 3 of 3 down, usually the most dramatic part. There are a few minor imperfections that make this outlook not totally elegant in a EW sense, but we will overlook that. Note that this scenario will be negated if the DAX climbs above 6341 , just 40 points away.
By the way, the Dow came to within 2 points of 1694, the 61.8% retracement I calculated this morning. Perhaps it means some thing, perhaps not, but interestingly both the Dow and the Dax are at critical junctures.