Replies to post #18628 on Short Term Trading Member Forum

[techcharter]

DAX German Market.
The DAX has been in a bear market rally over the last 3 years.

Weekly chart:
Stochastics are in the Overbought area again. Much of the past 2 years the DAX has been in the overbought area.
The Bollinger bands have been widening the past several months.The price has followed the upper band. This week the price pulled away from the upper band.
The MACD and its histogram continue to work their way higher. This typical of a blow off top.
RSI is in the overbought area for the third time in a year.
The elliott wavw for the bear market rally that started in March '03 looks like a zigzag.
The zag started in Aug '04 and is nearly complete. The zag is extending. The strong rate of rally this late in the game makes the chart parabolic. Extensions and parabolic spikes are followed by equally fast retracements.

Daily charts:
The stochastics gave a SELL signal. There is still room for further downside as the stochastics are not oversold.
The bollinger bands are pinching, and the price has crossed from the upper to lower band.
MACD and histogram gave SELL signals.
RSI was in the overbought area and has given a SELL signal.
The elliott wave count is wave 4 of the zag wag a flat occurring in early February. Wave 5 looks like an ending diagonal (ED). Two things point to and ED. The choppy advance, and the ED was nearly retraced very quickly (nearly all on Feb 28 2006).

While the DAX weekly charts are flashing warning signs, the daily charts are flashing SELL signals.