Today the DAX dropped 4+% in a matter of 18 minutes, I assume they were not impressed by Mr. Buffett’s impulsive interest in Bank of America. Others have it that rumors , quickly countered by new confirmations, of credit downgrades across Europe were gaining currency . An even less plausible argument was that since short-selling was banned all over Europe except for Frankfurt, they became the lightning rod for such nefarious activities.  Whatever the case, it fits nicely with the count I had in mind for the DAX as shown in the above chart. There are a good number of variations to this theme but this is roughly what I would expect.  The (intermediate!) low should be around 5100 to 5000. The risk is that things go faster and lower.

Just to make sure that my bullish comments are properly understood, I am bullish but only  for  five  hundred points or so. Next BIG move is still down, down a lot and this may only be the beginning. Cash at 0% might just be the bargain of the century.

The DAX should drop further, the structure to date cannot possible be complete. At best just the a leg could be complete but even then as a minimum we should get a b and c.

The DAX has an interesting chart in that no other major index looks anything like it. Of course they all have the same ups and downs but they do not have this very distinct triangle pattern. That this is unique to the DAX is perhaps a hint that it is incorrect,  but one must keep an open mind at all times.     A triangle has at least 5 waves, 3-3-3-3-3 (in some cases it extends). All the waves in this chart appear to conform to the a-b-c structure for each leg, except wave B, the second one. It could be a 3-wave affair but superficially it certainly looks more like 5. If that detail is overlooked the triangle, so far at least, is legitimate. The respective sizes is also within the normal parameters.

E is not yet complete, it may fall short of a normal target or it may exceed it. Normal would be about 4500, the absolute low would be about 3600. The alternative count, which applies to almost all other indices would call for a much lower drop. Just something to keep in the back of your mind.