German DAX is unfolding a five-wave sideways pattern on the 4h time frame chart. We are tracking an A-B-C-D-E triangle, where the latest price activity suggests an end for a leg D of a triangle, meaning one more turn lower as leg E may show up. Leg E can unfold a three-wave A-B-C move towards the lower triangle line, or there is also a possibility that it unfolds a minor triangle pattern. In both cases, more upside is expected.

Once all five legs are seen, and we see a new five-wave rally above the upper triangle line, and above the swing high at 12964 level, that is when a bullish continuation would be considered.

German DAX, 4h

If the German DAX starts breaking below the 12200 level, then we would switch our attention to count #2, where another complex correction in wave II can be underway.

German DAX, daily