The year 2022 has started with macroeconomic anxiety and clamor around monetary policy talking points, while stock markets have been wreaked by volatility. Whether this turns out to be a well-deserved respite for the broader bull run or a long-drawn slide to infamy remains to be seen.
In any eventuality, TA should help to draw a game plan and aid us to grasp opportunities even if headwinds prevail.
The above chart depicts a hypothesis for DAX performance index using harmonic patterns:
A standard retracement from January 2022 top works out to a key turning point at level 14500. However, the structure would not be invalidated until the barrier fails at level 13800. Meeting that criteria, a relief rally would ensue until 15800, fulling the pattern. It should be noted that the definition of the pattern still implies a bearish outcome. Timeframe for the action to play out is between Feb and mid-May or early June 2022.
In regards to crypto markets; some enthusiasts could argue stock comparisons to be irrelevant or unfit. However, inferring from how the market is developing from here on out the gyrations between asset classes may become more cohesive when institutional involvement and their active participation increase.