Frank Cappelleri, CMT, CFA, who currently serves as Chief Market Technician at Instinet, said Thursday that the DAX “is close to confirming a huge topping formation,” according to a report from The Technical Analyst.

“Cappelleri says that if the DAX breaks below the neckline of a potential head-and-shoulders pattern on a closing weekly basis, it would complete a large top (see Chart 1). Not only would this be bearish for German equities, but it could also be a bad omen for US equities, with the S&P 500 also currently testing key support from its 200-day moving average and long-term trendline,” said the report.

Read the full report on The Technical Analyst and view all Cappelleri’s charts here: All Eyes On DAX