DAX Reaches New All-Time Highs; Is An Ending Diagonal Nearing Completion?

The German DAX continues to push higher, reaching new all-time highs and raising the possibility that the market is already trading within its final fifth wave. While the bullish momentum remains intact, the current price structure deserves some caution, as we could be approaching the late stages of a larger five-wave advance. In particular, an ending diagonal remains a potential scenario, which would suggest that the current bullish trend is nearing exhaustion and that upside potential may be more limited than it appears.

From a daily chart perspective, there is still room for additional gains, with the next potential upside areas around 27,000 and possibly even 28,000. However, if the DAX is indeed forming an ending diagonal, these levels could become important reversal zones, as such patterns typically develop near the end of a trend and are often followed by a sharp change in direction. Another possibility is that the market will first turn lower into an additional wave four within the developing diagonal before attempting one final push higher to complete the entire structure.

On the 4-hour chart, the short-term wave structure still supports further upside, with the advance potentially unfolding as an extended wave C or even wave three. As long as the DAX holds above 26,160, the bullish scenario remains favored, leaving room for another leg higher before any more significant reversal or corrective phase develops.

Overall, the broader trend remains bullish, but the possibility of an ending diagonal means traders should pay close attention to the developing wave structure as the DAX approaches the 27,000–28,000 area.