dax daily outlook wed 11 may 2016 potential further drop in progress below 10063106 resistance 18108

(Click to enlarge charts)

What happened earlier/yesterday

The Germany 30 Index (proxy for the DAX futures) has traded sideways below the predefined short-term intermediate resistance at 10070 despite the positive tone set by the U.S. benchmark stock indices during the first half on the U.S. session.

Please click on this link for a recap on our previous daily short-term outlook/strategy.

Key elements

• Current price action has started to retreat right at the short-term descending trendline from 21 April 2016 high, the reintegrated (failure bullish breakout above the 17/23/ 30 March 2016 range top) long-term pull-back resistance from 11 September 2011 low (in dotted light blue as per highlighted in the daily chart) and now a former short-term ascending trendline from 09 May 2016 low area @3pm now turns pull-back resistance which all confluences at the 10063/106 zone.
• The near-term supports rests at 9900 former minor swing high area of 05 May 2016  follow by 9730 (minor swing low of 06 May 2016).
• Based on the Elliot Wave Principal and fractal analysis, the corrective wave 4 (rebound) from last Friday low of 9733 is likely to have topped at 10063/106 and right now, the Index should resume its potential bearish downleg wave 5 of a minor degree to complete the intermediate impulsive bearish wave structure labelled as 1/  in place since 21 April 2016 high.

Key levels (1 to 3 days)

Pivot (key resistance): 10063/106

Supports: 9900 & 9730

Next resistance: 10165 (weekly pivot)

Conclusion

Medium-term bearish trend remains intact. Now as long as the revised daily short-term pivotal resistance of 10063/106 is not surpassed, the Index is likely to see a further decline to target 9900 before 9730 in the first step.

On the other hand, a break above the 10063/106 short-term pivotal resistance may negate the bearish tone to see a push up to retest the current medium-term weekly pivotal resistance at 10165.

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