BarroMetrics Views: DAX Revisted 2015-03-30
In ‘The Start of a Heavy 25 Days“, I suggested that the DAX would provide a low risk, high reward trade.
Today the DAX provided an entry scenario.
Figure 1 shows the Ray Wave Count. Wave (2) was a simple wave; this suggests Wave (4) will be complex – the most usual complex is a sideways market. If a sideways structure is to form, we should see the DAX move to the Primary Sell Zone (12,189 to 12220), and then head down to the Primary Buy Zone (11649 to 11619). The minimum retracement would be the 21.4% line, 11747/11748.
A breach of 11177 would invalidate the wave (4) count.
This allows us to prepare for an entry at the Primary Buy Zone, with stops below 11177. With the 13-week swing in a strong uptrend (what I call a R2 Trend), it is difficult to project a reward. I’d deal with that once an entry is executed.
FIGURE 1 Ray Wave
FIGURE 2 Sideways Zone