Last week on German indices was bearish for fourth time in a row. There are only 3 days left in this quarter, that should theoretically help bulls. They can find their chance also in double bottom pattern and long shadow on weekly chart. Bullish trend line from 2011 was also defended, however bounce was not so dynamic as in August.

From the other side, bears are now supported by volume. Each bullish candle in the last two weeks had smaller volume than bearish ones. Volume shows direction of capital, what currently suggests continuation of decreases. Elliott waves also suggest that it is not the end of drops. Bullish impulse is ended and decrease is at 38.2% retracement since April. According to wave theory bullish impulse is often corrected to wave 4 which should suggest range of decreases to fibo 50% 8,800 pts – fibo 61,8% 7,900 pts. In this area there is last year low – 8,300 pts, and I believe that decreases can reach there before coming back to grow.


Better than main German index looks his smaller brother – MDAX, which collects 50 of average companies. Here also there bullish impulse ended, but decreases retraced just 23.6% of gains. Optimism of bulls on MDAX can be too big. After gains there should be correction and it is possible that bears didn’t finished yet.

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