DAX: Short at 11077-11100

September 1, 2016

That's a possible scenario :) Bearish Gartley Pattern confirmed with the CAC 40 (France). It's consistent with the target of the Dow Jones at 18850 and of the Nikkei at 17500. The CAC 40 will plummet after it gets to 4700. See my other posts for more info about the CAC. This is why the DAX is weaker than the CAC 40 and that US markets are also overall more resilient to grind up compared to the French index. Their targets are lower than those of the latter one.

Komen:

Arbitrage opportunity: Can do some "correlation" analysis. If a DAX is equivalent to 3-4 points of the CAC 40, then if the target of the French index is 4700 (it is currently sitting at around 4470), we are 230 points below target. The DAX is currently around 10630, which a target of (11077 - 10630) = 447.

If we multiply the targets of the CAC 40 by 3 or 4, we have something between 230 x 3 = 690 points of the DAX or 230 x 4 = 920 points of the DAX.

The CAC has to be roughly twice as strong as the DAX so it has either to go up in a sharper fashion, or the DAX has to pull back more often etc.