DAX
Prices are trapped inside a downward sloping wedge pattern. Usually, this pattern resolves in a bullish breakout and prices usually move back to the start of the wedge pattern….in this case around 12700.
However, since the May highs, DAX has been making lower lows and lower highs. Breaking below 12100 will continue this sequence and worsen the longer-term view we have for DAX as it will put in danger the 2018 lows. My most probable scenario would be a bounce first with a lower high towards 12500-12600 and then a move lower to continue the bearish trend since May lower. The 12900 level is key to this scenario and a break above it will cancel my bearish view and put bulls back in control of the trend.
SPX
The trend remains bullish as price so far is making healthy pullbacks towards the 2790-2800 support area. Every time we see prices reach that area the Daily candles turn green or have long lower tails confirming the importance of the support area there.
Unless we break below the magenta horizontal line and the blue upward sloping trend line support, the trend will favor bulls. Short-term resistance is at 2860 while support remains at 2790-2800. A break below this level will open the way for a push towards 2750. If this level is also broken we should expect the price to find support at 2670. If this level is broken also, we should expect new 2018 lows to be seen.
