BOTTOM LINE: This week's price action in European stock indices suggests that they have topped for this cycle, and will continue lower after a brief (up to 48 hours) correction higher.
Below is an hourly chart of the German DAX. From the high last Friday (US Payrolls day), the DAX fell in a clear impulse. I believe that the high last Friday finished a corrective structure in play since the 3 November low. This means that a new impulse is unfolding, which should soon take out that November low (5316, or 6.7% lower). DAX is one of the stronger EU indices; Italy's MIB is much weaker, and is perhaps a better candidate for a short.
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