DAX: A Huge Head and Shoulders pattern is already forming

We believe that 2016 will be a Bear Year for equities in general(2016: The Year of the Bear (II)).Specifically for DAX we believe that it will move down towards 9000(H&S neckline) then move towards 10.400(Right Shoulder) and finally move towards around 6800 on 4Q2016. We predict that this correction will move DAX price aprox 45% lower from March-April 2015 Highs.

Last move up for Europe?

Last month European Stocks ETF (VGK) broke down from a supporting trendline causing serious technical damage to its chart(http://goldenopportunitytrading.blogspot.co.uk/2014/08/broken-europe.html).Then VGK  hit  55 Exponential moving average (weekly) and RSI(weekly) 40 and bounced and now is moving below the trendline from mid-2012.There is a substantial possibility for VGK to move again towards 61 or even 65,5.During this upmove if RSI(weekly) stays below 65 we are probably witnessing a topping pattern for european equities (double top, or head and shoulders)

Time will tell...

Europe: 2 possible scenarios

2 possible scenarios for European stocks (VGK):

Scenario A (H&S)
Currently start forming a Left Shoulder:

If the above scenario plays out then targets are 45 and maybe  even 34$.We favor this scenario

Scenario B (Trading range ~54-60)
This is a rather neutral scenario although we believe that if it plays out , it will be followed by a gradual descend towards 50 and later on even 44$