Today is the last chance in order to get a deeper retracement, if my short-term scenario, which I have been discussing for SPX, is going to play out.
It is obvious that the market is in a state of "limbo", with huge expectations, waiting for Bernanke`s speech next Friday. But, in my opinion the real price mover will be the ECB meeting next Thursday.
As a reminder my preferred scenario calls for a corrective wave (B) off the June 4 low that is tracing a Triple Zig Zag.
Since both the last up leg off the August 2 higher low and the current pullback is corrective I believe that the TZZ is not over yet as it need the last wave (C) up.
This scenario that I have been discussing for SPX can also be applied in the case of the DAX. (I use the future contract for this analysis).
In my opinion If price is now unfolding a Zig Zag down in order to establish the bottom of the assumed wave (B), it should be larger.
Hence the range of the 0.382 - 0.5 retracement should come into play.
In addition even though, lately, bearish set ups have to be taken with a grain of salt, there is a potential H&S, which, if its target is fulfilled, price could reach the 50 d - Trend Line off the June lows.
Today is probably the last chance for the bears to attempt to trigger sell stops below 6885.50 (the neckline of the assumed H&S).
