5.11.11 - DAX: Elliot Wave Analysis

As I already said, I'm expecting the DAX to fall to 4.600 in the following months. As an analyst you already have to be open for new opinions and ready to change your point of view.

That's expecially true if you're holding a position which runs losses: It's wrong to hope to price to come back. It's right to stay objective and verify if it makes sense to wait.However...

I did not find valuable information or analysis that the DAX will reach higher highs. The opposite is true: An Elliot Wave analysis on the chart leads me to the same conclusion: In August the DAX has started a corrective pattern. Next destination will be below Septembers low!

It is possible that the corrective pattern extends from a-b-c to a double or triple corrective pattern, which also could be interpreted as a new motive.

Now that the public seems to believe in a "return of the markets" it's a good advise not to follow. The crowd reacts, investors act. We act and prepare by entering short - about now at 6.000 points - without big of a leverage. We are talking about weeks or months of investment, price fluctiations should not be of concern. Price should not go beyond 6.400 anymore, so set your SL above that, 6.600 points.

Also stay true to Gold, as this will be the number one shore for investors during the upcoming correction.