Merck KGaA, MRK, DE0006599905, XETRA, EUR

2 · Forecasts

Probabilities are the normalised calibrated confidences from scenario_probabilities over the three gate-passing counts (0.6752 / 0.5806 / 0.3635). They are honest estimates, not guarantees. Scenarios 2 and 3 are the two mandatory reframes: scenario 2 is the premature-termination test of the completed Intermediate (1); scenario 3 is the degree-reframe of the completed Primary ⓐ decline.

3 · Executive Summary

• Wave position. The 2021–2026 bear phase is counted as Cycle IV, a Primary zigzag ⓐ-ⓑ-ⓒ that ended on 23 March 2026 at 100.70 with a truncated fifth — Intermediate (5) stopped exactly on the Intermediate (3) low of 7 August 2025, an exact double bottom. Cycle V is now under way; the primary count places price in Intermediate (2) of Primary ①, inside its Minor B bounce.
• Key signal. The base-channel breakout above the 131.65 shelf was confirmed on 4 June 2026 and is still active, and the 25 June session carried a 2.68× volume spike (1.06m shares) into the 148.65 high — a classic terminal thrust for Intermediate (1), not the middle of one.
• Top target. Near term the correction targets 124.68 / 119.02. Beyond it, Intermediate (3) projects to 169.80–199.43, with the 2.0× base-range level at 162.60 as the first waypoint; the bullish reframe (36%) reaches 150.65–162.60 sooner, without the dip.
• Biggest risk. The mandatory degree-reframe (22%): if the 2021–2026 decline is only waves ①–③ of a larger Cycle-degree impulse down, the entire rally is Primary ④ and a fifth wave toward 89–72 follows. That count dies on any trade above 153.10; the bull case dies below 100.70.
• Confidence. Calibrated 0.675 (guidelines 0.506, Fibonacci 0.689, indicators 1.000; weights 0.5/0.25/0.25). The gate returns valid: true with no near-miss caveats. The margin over the bullish reframe is thin (42% vs 36%), and classify_pullback on the 0.387 retrace actually returns fourth_wave_like, which favours that reframe — treat the near-term path as genuinely two-sided.

4 · Current Position in the Cycle

Current wave: Intermediate (2) of Primary ① of Cycle V — a corrective wave down, in progress since 1 July 2026 at 148.65. Within it, Minor A (148.65 → 130.10, 1–21 July) is complete and Minor B is rising from 130.10; the last bar closed at 139.15 on 24 July 2026.

Degree hierarchy

Confidence rationale

validate_count.py returns valid: true for this tree: 35 pattern-rule checks, 45 subdivision checks and 43 pivot-extreme checks ran mechanically, with 0 failures, 0 near-miss caveats and 7 items left to analyst judgment. The three headline invariants all hold — wave2_not_beyond_start_wave1: true, wave3_not_shortest: true, wave4_not_beyond_end_wave1: true.

Judgment items resolved. (a) pitfall_wave4_retrace_gt_50pct_w3 at Supercycle (V): Cycle IV retraces 0.638 of Cycle III — deep, but R3 is comfortably clear (the IV low of 100.70 sits far above the Cycle I top of 54.63) and the low lands inside sub-wave-four-of-III territory (70.68–111.85), the textbook resting place for a fourth wave; the pivot is verified, so the flag is noted and dismissed. (b) not_all_of_1_3_5_extended on six impulse nodes: in every case exactly one sub-wave is extended (Cycle III; Intermediate (3) inside ⓒ; Minor 3 inside Intermediate (1) and inside Intermediate (5); Minute iii inside Minor 1) — confirmed, none of the counts has all three motive legs extended. (c) The generic corrective type accepted for Intermediate (2) is deliberate: Minor A is itself a three-wave a-b-c, so the family is not yet fixed (W-X-Y double zigzag if Minor B stays below 0.79 of A, a flat if B exceeds 0.90 of A at 146.40).

Scores. guideline_score 0.506, fib_confluence_score 0.6886, indicator_confluence_score 1.000 → blended 0.6752 at weights 0.5/0.25/0.25. calibrate_confidence was run with the nesting_unverified flag set (Cycle I, Cycle III, Primary ⓐ and Intermediate (1) of ⓒ are asserted rather than decomposed — they are macro/monthly context or, in the case of the 2023 decline, not resolvable into a clean five at daily granularity). The 0.75 cap did not bind because the raw blend is already below it, so caps_applied is empty.

Premature-termination test. Because a large impulse (Intermediate (1)) is labelled complete, the reframe was constructed and scored, not assumed away: scenario 2 re-cuts the same advance so that the 1 July high is only Minor 3 and Minor 5 is still to come. classify_pullback(0.387) returns fourth_wave_like, which argues for that reframe; the deterministic scores nonetheless favour the completed reading, chiefly because the mechanical indicator checklist scores 1.000 for it against 0.4286 for the reframe. The 42/36 split is the honest expression of that tension.

Guideline checklist (weighted, deterministic)

guideline_score = Σ(weight · satisfied) / Σ(weight) = 0.506 over 20 applicable guidelines.

Alternate count

Alternate (36%): Minor 5 of Intermediate (1) is still to come — the July decline is Minor 4 (0.441 retrace of Minor 3, terminating within 0.23 of the 0.382 retracement of the whole advance at 130.33). Targets 150.65 / 156.09 / 162.60. Invalidated on a daily close below 130.10; structurally void below 121.25 (R3, the Minor 1 top).
Second alternate (22%): the bearish degree-reframe — Cycle A down is unfinished and the whole rally is Primary ④. Invalidated above 153.10.

5 · Current Wave Analysis

Sub-wave structure

Intermediate (1) — complete, 100.70 (23 Mar) → 148.65 (1 Jul), +47.6%: Minor 1 100.70→121.25 · Minor 2 121.25→106.60 (0.713 retrace, sharp a-b-c) · Minor 3 106.60→140.25 (1.637 × Minor 1, the extended leg, RSI_14 peaking at 79.88 on 4 June) · Minor 4 140.25→131.40 (0.263 retrace) · Minor 5 131.40→148.65, whose 25 June session printed a 2.68× volume spike (1,061,481 vs a 396,142 twenty-bar average) — a throw-over-style exhaustion print.

Intermediate (2) — in progress: Minor A 148.65→130.10 subdivides a (148.65→137.70), b (137.70→142.20, 0.411 retrace), c (142.20→130.10, c = 1.105×a). Minor B is rising from 130.10; on 30-minute data it counts (i) 130.10→138.35, (ii) 138.35→134.95, (iii) 134.95→140.90, with a shallow (iv) into the 24 July close at 139.15. Minor B's normal ceiling is 137.15–144.75 (0.38–0.79 of A); a push through 146.40 would make the correction a flat and materially raise the odds of the bullish alternate instead.

Fibonacci targets & supports

Indicator readings (current)

Daily RSI_14 54.98 (24 Jul), down from 78.16 at the 25 June thrust and 75.52 at the 1 July high — a clear bearish momentum divergence into that high. Daily UO is unavailable after 30 June (the bundle's Close is missing on 1 July 2026, which blanks the oscillator and the SMAs from that bar); the weekly reading is UO 54.19, RSI_14 60.73. Price is above SMA_50 (126.34), SMA_100 (121.16) and SMA_200 (119.43) — a golden-cross backdrop consistent with a corrective, not impulsive, decline. Volume on the 21 July low was 532,238, the heaviest of the pullback, with 216,392 on the 24 July bounce bar — a light-volume B wave.

Wave-pivot indicator table

* The bundle's Close is missing on 1 July 2026; RSI_14 is carried forward on that bar and UO/SMA columns are blank from it onward. Prices, highs, lows and volumes are unaffected.

Indicator confluence checklist (deterministic)

indicator_score = 1.000 over the applicable checks at the labelled Intermediate (1) pivots (W1 21 Apr, W2 30 Apr, W3 5 Jun, W4 16 Jun, W5 1 Jul). Under the bullish reframe the same routine returns 0.4286 — the single largest driver of the 42/36 split.

Fibonacci confluence detail

fib_score = 0.6886 (tolerance 0.15 in absolute ratio units).

6 · Multi-Timeframe Confluence

Precision layer signals

Alignment narrative

The two higher layers agree: monthly and weekly both read the market as having completed a four-and-a-bit-year Cycle-degree correction at an exact 100.70 double bottom and started a new advance, confirmed by the base-channel breakout of 4 June and by price holding above all three long SMAs. The disagreement is entirely inside the current swing: the daily count says the first Intermediate leg of that advance is finished and needs a normal 0.5–0.618 pullback, while the 1-hour and 30-minute layers are currently pointing up in a B-wave bounce. That is exactly what a second wave looks like from the inside, so the conflict is expected rather than disqualifying — but it is also the single fact that keeps the bullish reframe alive at 36%. The resolution level is 144.75/146.40: contained there, the primary count proceeds toward 124.7–119.0; through it and especially through 148.65, the count flips to the reframe and 150.65–162.60 comes into play without the dip.

7 · Waves — 1-Hour

8 · Waves — Daily

9 · Waves — Weekly

10 · Disclaimer