#202426 - priceactiontds - weekly update - dax
Good Evening and I hope you are well.
dax cfd
Quote from last week:
comment: Sell vacuum theory was spot on. Bears printed 2 big good looking bars right to huge support and got no follow through. Bulls used it to trade back at least to the daily ema and 2/3 of the move. Huge price level around 18400/18450 with the ema. Bulls want above to test upper expanding triangle around 18600 and bears want a bigger second leg down to 17600. Both completely valid arguments and I will wait for a clear breakout before following.
current market cycle: trading range - go look at the monthly chart. It’s a clear 4 month trading range. —unchanged
key levels: small range 17600 / 18500
bull case: Bulls already had 2 pushes up in this pullback and they want a third one to around 18600. Their first target is a 1h close above the daily ema 18430.
Invalidation is below 18260.
bear case: I do think bears last chance here at the daily ema or they risk another bull leg to 18600. I think the odds are 50/50 for either side on Monday/Tuesday. Bears see this as a higher pullback in the new steeper bear trend that started 2023-06-13 with the two big bear bars. If they fail, market will spend more time in the range 18000-18600.
Invalidation is a 1h close above 18460.
outlook last week:
→ Last Sunday we traded 18016 and now we are at 18367. High of the week was 18448 so that outlook was as good as it gets. Hope you made some.
short term: Neutral again. Need to see a clear winner here at the daily 20ema for the next direction.
medium-long term: 17000 over the next 3-6 Months and when we get there, I update again.
current swing trade: None but will look for weakness on Monday/Tuesday for another big leg down. Sp500 and Nasdaq have to also be weak for that.
Chart update: No bigger updates on my chart. Green two legged correction (ABC) was spot on and is still valid.
dax cfd
Quote from last week:
bull case: Bulls see it as a small pullback and a sell vacuum on Friday to the big round support 18000. They want to create the same reversal as they did on 2024-04-19 with a 2% up day. The pullback in late March and April was 13 days long while we are in a 21 day long pullback. Bulls also argue that this is the first touch of the weekly 20ema since 2023-11 when we sliced through and have not touched it once since. Trends tend to test the extreme after the trend line is broken. I have absolutely no confidence in the bears to crash from here on, without at least a retest of the bull trend line at around 18300. If bears manage to close the gap to 17100, I am obviously wrong.
comment: Sell vacuum theory was spot on. Bears printed 2 big good looking bars right to huge support and got no follow through. Bulls used it to trade back at least to the daily ema and 2/3 of the move. Huge price level around 18400/18450 with the ema. Bulls want above to test upper expanding triangle around 18600 and bears want a bigger second leg down to 17600. Both completely valid arguments and I will wait for a clear breakout before following.
current market cycle: trading range - go look at the monthly chart. It’s a clear 4 month trading range. —unchanged
key levels: small range 17600 / 18500
bull case: Bulls already had 2 pushes up in this pullback and they want a third one to around 18600. Their first target is a 1h close above the daily ema 18430.
Invalidation is below 18260.
bear case: I do think bears last chance here at the daily ema or they risk another bull leg to 18600. I think the odds are 50/50 for either side on Monday/Tuesday. Bears see this as a higher pullback in the new steeper bear trend that started 2023-06-13 with the two big bear bars. If they fail, market will spend more time in the range 18000-18600.
Invalidation is a 1h close above 18460.
outlook last week:
“short term: Neutral. Please read on so you know why and how I will trade it.
So bears are in control. Below all ema and really big red bars and all red bars for 5 weeks. I’m still not shorting right at 18000. That’s insane. Can we go lower on momentum to 17600? Yes. Will I short it? Bet. R:R here is on the bull side if they build buying pressure and get follow through. Until all of that I am neutral.”
→ Last Sunday we traded 18016 and now we are at 18367. High of the week was 18448 so that outlook was as good as it gets. Hope you made some.
short term: Neutral again. Need to see a clear winner here at the daily 20ema for the next direction.
medium-long term: 17000 over the next 3-6 Months and when we get there, I update again.
current swing trade: None but will look for weakness on Monday/Tuesday for another big leg down. Sp500 and Nasdaq have to also be weak for that.
Chart update: No bigger updates on my chart. Green two legged correction (ABC) was spot on and is still valid.
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