DAX is correcting higher degree cycle from February 2016. Short-term Elliott Wave view suggests that Primary wave ((X)) ended with the rally to 12597.51. Decline from there is unfolding as a Zigzag Elliott Wave structure where Intermediate wave (A) ended at 11725 and Intermediate wave (B) is proposed complete at 12270.50 high in New York earlier today. However, Index still needs to break below Intermediate wave (A) at 11725 to give validity to this view.
Zigzag structure is a 5-3-5 sequence and according to Elliott wave theory, after ending the first 5 waves, there should be a correction against the first leg in 3, 7 or 11 swings. The correction should then fail & extend in another 5 waves into the direction of first leg, i.e either Higher/lower. In DAX case, Intermediate wave (B) bounce appears complete at 12270.50, and Index should do another extension lower in Intermediate wave (C) lower.
The internals of Intermediate wave (A) unfolded as 5 waves Elliott Wave Impulse structure where Minor wave 1 at 12388, Minor wave 2 ended at 12515.5, Minor wave 3 ended at 11867, Minor wave 4 ended at 12006.50, and Minor wave 5 of (A) ended at 11725. Internals of Intermediate wave (B) unfolded as Elliott Wave Zigzag correction where Minor wave A ended at 12028, Minor wave B ended at 11942.5, and Minor wave C of (B) ended at 12270.50. Near term, while bounces stay below 12270.50, and more importantly below 12597.5, expect the Index to extend lower.