DAX Xetra (cash index)
After the recovery failed to ignite, yesterday’s key break down below the pivot support at 12,600 has been a key move.
This completed a double top pattern and implies around 600 ticks of additional correction now.
Breaching the previous June low of 12,547 on not only an intraday basis but also a closing basis really does reflect a concerning shift in sentiment now.
Momentum indicators are now tracking lower with the RSI closing yesterday below 40 (lowest since late March), MACD lines on the brink of falling below neutral and the Stochastics also into bearish configuration.
The reaction of the next few sessions will be key now as momentum indicators suggest that rallies are now a chance to sell.
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