Good Evening and I hope you are well.
comment: Neutral and very similar to dax, as most of the time. I do think we will see one more leg down in this current bear trend before we could go sideways for longer, until earnings become the absolute fucking shitshow I expect them to become. We get daily news about big companies not exporting to China or to the US due to tariffs. No one believes this will go down smoothly. Bear trend line holding so far, 50% retracement for this bear trend was 19483 and the spike high last week was 19388 and bulls could not get above it this week. The daily 20ema is also right above us and every time market touched it, we sold and closed below. Triangle will likely break on Tuesday and I am having wet dreams about going below 17000 again.
current market cycle: bear trend but above 19388 it ends and we will be in a giant trading range
key levels: 15500 - 19500
bull case: Bulls want this trend to end and crush the hopes for a third leg down. That has not changed. Their only target is 19388 and if they get it, market is completely neutral and they will likely go for 20000 again. Bulls still have the triangle argument but below 18100 that is gone as well. At this point I think only very positive news could save the bulls. Market is likely waiting for big earnings next week and if Tesla surprises downwards, we will hopefully crash this m* again.
Invalidation is below 18000.
bear case: Last week my assumption was that the tariff exemptions were enough to pump this above the bull spike from the previous week but that failed and we went lower since. If even that can not lift the market to higher highs, what will? Only a big agreement with the EU and/or China. How likely is that? This US government doesn’t even know how to articulate their goals in negotiations, how do you think you could guess it? Market is in maximum limbo and since we are still somewhat high enough, we could see more risk-off trading. Until bears can get below 18000, we likely continue sideways. 3 big resistances held and the bear trend line is intact. Bears are heavily favored to continue down and I expect a third leg. Can the third leg get much below 16400? I don’t know but I doubt it. Only a deep recession would get us there and for that we would need earnings going real bad. Below 18000 I expect 17200 to be the next big support but a retest of 16400/16500 could happen.
Invalidation is above 19388.
short term: Neutral. Sideways most likely until a clear breakout above or below. Below 18000 we could do 17500 or 17000 fast. Above 19388 market is free to test much higher again.
medium-long term - Update from 2024-04-20: My most bearish target for 2025 was 17500ish, given in my year-end special. We had the clear W1 and W3 but now it’s messy.
Only a big tariff agreement news can move the markets and that can go either way. You have no edge in guessing what will happen, so having huge swing positions right now does not make much sense. If earnings go bad, we will go much lower. What is the next big support to be hit? The lows of 2022 at 12565. Can we really get there? With a deep recession and some bigger failings, sure but for now it’s unrealistic to expect it.
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.