Technical Analysis - German DAX 30

As I mentioned at the open this morning the chances for a little bounce are very high but the bounce was very weak. The German DAX could close the gap but failed then at the 5600 level. In my opinion there is still no bottoming process in work and therefore my target around 5000 to 5200 is still intact.

Between today's close and my target zone is just one level which could support the stock index and that is 5340. Nevertheless my main scenario is DAX down to at least 5200. From there we could see a little bounce into the year-end before selling off really hard.

Why I am still very bearish? Take a look at the weekly chart of the DAX.

This chart shows the German DAX 30 on a weekly basis with the 50 week exponential moving average. There are some outstanding similarities on the chart. The selloff in 2008 was similar in intense and time compared to this year's selloff. The rebound in 2008 stopped right at the 50 week exponential moving average like in October 2011. Maybe we will see a small bounce into year-end but then I think we could see a plunge into mid 2012.