InvestMate|DAX Finally On The Decline🥨🥨DAX Finally On The Decline
🥨Every investor has probably been waiting for some sort of downward correction on the dax.
🥨After a month-long accumulation, it was time for a decline.
🥨Today, we are down a full -3.28%.
🥨We are currently at the 0.236 level of the current upward wave, which I do not believe will hold the price for much longer.
🥨My target market is around the 0.382 level of the current upward wave, where I have identified a support zone.
🥨Looking at the pro-declining signals on the MACD and RSI I have no doubts about a drop to these levels
🥨The scenario I am playing out is a continuation of declines to the vicinity of the support zone. I'm aware of the possibility of a correction at any time, this should be taken into account, If the outlook changes I will publish a post with an update, so I encourage you to actively follow the profile and read the description carefully.
🚀If you appreciate my work and effort put into this post then I encourage you to leave a like and give a follow on my profile.🚀
D-DAX
DAX in false break reversalGlobal stocks sold off further after the European Central Bank warned of more rate increases at the pace of 50 basis points, adding to a hawkish tone from the Federal Reserve the day before.
Among the more interesting indices to watch is the German DAX.
After faking out above the previous high at 14605, the DAX hasn't looked back, selling off aggressively over the past couple of days.
Today, the German index broke below the recent low at 14192, before plunging further lower. This level is now going to be the most important short-term resistance going forward. For as long as this hold on any bounces, the path of least resistance would remain to the downside.
Support comes in around 13975, which was being tested at the time of writing. This was previously resistance. I would expect to see at least a bit of a bounce from this level given today's sharp selling.
But the damage is done. Stocks are likely heading lower for a while now, with all the major central banks out of the way and their main message being that interest rates will rise further and stay high for longer than the markets had assumed. Also, with concerns about growth intensifying, investors will find it difficult to justify buying stocks at these lofty levels.
By Fawad Razaqzada on behalf of FOREX.com
Buying DAX at market.GER40 - Intraday - We look to Buy at 14302 (stop at 14229)
Daily signals are bullish.
A lower correction is expected.
20 1day EMA is at 14302.
The 1 day moving average should provide support at 14300.
We look to buy dips.
We look for a temporary move lower.
Expect trading to remain mixed and volatile.
Our profit targets will be 14488 and 14538
Resistance: 14450 / 14500 / 14550
Support: 14360 / 14300 / 14200
Risk Disclaimer
The trade ideas beyond this page are for informational purposes only and do not constitute investment advice or a solicitation to trade. This information is provided by Signal Centre, a third-party unaffiliated with OANDA, and is intended for general circulation only. OANDA does not guarantee the accuracy of this information and assumes no responsibilities for the information provided by the third party. The information does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.
You accept that you assume all risks in independently viewing the contents and selecting a chosen strategy.
Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, Oanda Asia Pacific Pte Ltd (“OAP“) accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore customers should contact OAP at 6579 8289 for matters arising from, or in connection with, the information/research distributed.
Back to Square 1, 15th December 2022🖼 Daily Technical Picture 📈
➤ If we took a two day view of events, the S&P500 managed to make little headway up or down. Pre-data release, I eluded to people getting a bit over excited by bidding up the VIX. Of course, there was the excitement of the CPI data intra-day. That has all fizzled out for now.
➤ Now that all the excitement is over for another month, I think there is some positive bias here. I will put a bit of money to work. I'm looking for VIX to continue lower in the very short-term.
➤ That being said, all other indices such as the NASDAQ, RUSSELL, DAX etc all look very "messy" in terms of their price structure. I will leave them alone for now.
➤ I currently hold a +33% long exposure. The maximum portfolio exposure is +/- 200% on capital, the level of highest conviction.
➤ Conclusion: All the excitement is now for the Football World Cup Final!
DAX: Still in an Ascending Triangle. Opportunities both ways.DAX couldn't have given us a better trade yesterday as following the lower than expected U.S. CPI (which is a big plus in the ongoing battle to control inflation), the price broke above the 4H MA50 (14,376.70) and came close to the 14,710 (June 6th 2022 High) Resistance, getting rejected at 14,670, which is a Higher High since November 14th.
The price is now back down to the 4H MA50 and it remains to be seen if it acts as a Support. With 4H neutral again (RSI = 52.784, MACD = 16.600, ADX = 23.724) but especially ahead of today's critical Fed Rate Decision, the price can swing both ways and even more so violently. The 4H MA200 is at 14,103.20 now, and will be my buy entry but if we close the day below 14,100 I will book the loss and instead sell, targeting the 1D MA50 (13,646.70 and rising rapidly), which is the ultimate Support during long-term uptrends.
If however the price breaks above 14,710 first, I will take the break-out buy and target the 14,940 (March 29 2022 High) Resistance.
Previous DAX chart:
Closing the Gap, 14th December 2022🖼 Daily Technical Picture
➤ Inflation data came in softer than expected and equities prices jumped with enthusiasm. By end of trade, much of the gains were given up.
➤ The result of the inflation data resulted in a huge price gap between the previous day's close and market open. Gaps like these tend to get closed over time or like today...immediately. Note that there is still an lower unclosed gap created on 10th Nov also due to the CPI data.
➤ That being said, S&P500 set a new high since the 13th Oct bottom. I don't yet see any signs that this uptrend is done. The Fed interest rate decision and subsequent price movement could change this. A significant Bearish bar may result in a Change of Character.
➤ I currently hold NO exposure. The maximum portfolio exposure is +/- 200% on capital, the level of highest conviction.
➤ Conclusion: Time to be patient.
Buying DE40 at daily 20 EMA.GER40 - Intraday - We look to Buy at 14271 (stop at 14198)
Daily signals are mildly bullish.
20 1day EMA is at 14271.
We look to buy dips. Daily momentum has stalled and our bias is now neutral.
The 1 day moving average should provide support at 14271.
Our profit targets will be 14448 and 14498
Resistance: 14390 / 14450 / 14500
Support: 14300 / 14250 / 14200
Risk Disclaimer
The trade ideas beyond this page are for informational purposes only and do not constitute investment advice or a solicitation to trade. This information is provided by Signal Centre, a third-party unaffiliated with OANDA, and is intended for general circulation only. OANDA does not guarantee the accuracy of this information and assumes no responsibilities for the information provided by the third party. The information does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.
You accept that you assume all risks in independently viewing the contents and selecting a chosen strategy.
Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, Oanda Asia Pacific Pte Ltd (“OAP“) accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore customers should contact OAP at 6579 8289 for matters arising from, or in connection with, the information/research distributed.
What's with the VIX? 13th December 2022🖼 Daily Technical Picture 📈
➤ Today we saw the unusual situation where the VIX jumped significantly higher and the S&P500 equity index also rose higher. Normally, these two indices move opposite to each other i.e. higher level of volatility (often due to fear) leads to lower equity prices and vice versa.
➤ Astute watchers would have seen this occurrence a few times in the past. The last time I recall something like this happening was during August 2020. For five trading days, S&P500 moved exponentially higher whilst VIX jumped from 20 to above 30. S&P500 then reversed quickly and wiped out all the gains within a couple of days.
➤ I'm not expecting the above outcome with imminent Inflation data on 13th Dec and the Fed interest rate decision on 14th Dec. The relationship with the VIX and S&P500 should snap back very quickly. Perhaps what is happening is that there are big bets by both Bulls and Bears, bidding up the price of volatility. What may happen is a complete fizzle in equity prices with a lack of movement.
➤ I currently hold a -8% short exposure. The maximum portfolio exposure is +/- 200% on capital, the level of highest conviction.
➤ Conclusion: Perhaps people's expectations are getting ahead of themselves.
DAX Weekly Volatility Analysis 12-16 Dec 2022 DAX Weekly Volatility Analysis 12-16 Dec 2022
We can see that currently the implied volatility for this week is around 2.82%, DOWN from 2.9% last week according to DVOL data
With this in mind, currently from ATR point of view we are located in the 24th percentile,
while according to VDAX, we are on 8th percentile.
Based on this, we can expect that the current weekly candles ( from open to close ) are going to between:
Bullish: 1.87% movement
Bearish: 2.4% movement
At the same time, with this data, we can make a top/bot channel which is going to contain inside the movement of this asset,
meaning that there is a 17.9% that our close of the weekly candle of this asset is going to be either above/below the next channel:
TOP: 14714
BOT: 13886
Taking into consideration the previous weekly high/low, currently for this candle there is :
35% probability we are going to touch previous high 14500
66% probability we are going to touch previous low 14200
Lastly, from the technical analysis point of view, currently from
Weekly timeframe indicates 66% BULLISH trend from the moving averages index
Daily timeframe indicates 40% BULLISH trend from the moving averages index
4H timeframe indicates 13% BEARISH trend from the moving averages index
Sell DAXBearish flag and a turnaround yesterday right on the fib 50 level. Now it's trading around 14300 and the price tested the fib 38.2 level.
I think it will break the flag in the next one or two hours and afterwards move towards the Thursday lows. A break through the support at 14190 will give the price more downside momentum.
My first target is the fib 100% extension at 13990 which lies well at the august highs at 13980. The second target is the fib 161.8% extension at 13745 which is a bit higher than the Nov 8 highs.
All About Support, 12th December 2022🖼 Daily Technical Picture 📈
➤ The S&P500 equity index is holding above the key support level at 390/3900. A confident break below will result in a Change of Character (CHoCH) in the uptrend since the Oct low.
➤ A CHoCH results in a significant pause in the uptrend or a reversal of the trend.
➤ By holding above the support level, there would not be a CHoCH. Hence the bias is for continued upside.
➤ Inflation data on 13th and the Fed interest rate decision on 14th Dec are clear catalysts for price movement.
➤ I currently hold a -17% short exposure. The maximum portfolio exposure is +/- 200% on capital, the level of highest conviction.
➤ Conclusion: Price is set-up perfectly for a binary outcome. I don't want to be heavily involved here.
DAX 1D Golden Cross is bullish but mid-term indicates volatilityToday the German stock market (DAX) completed a Golden Cross pattern on the 1D time-frame, which is when the 1D MA50 (blue trend-line) crosses above the 1D MA200 (orange trend-line). That is technically a bullish formation and that is what we interpret it as, at least on the long-term. Historically a 1D Golden Cross delivers new Bull Phases on DAX and it was such a Cross that took it out of the last major Bull Cycle in 2009 (U.S. housing crisis).
On this study though we give particular attention to the previous two Golden Crosses, which all share similar characteristics to today's. Once the index broke above the Bear Phase's Lower Highs trend-line, the Golden Cross was formed shortly after, with the 1W RSI getting rejected on roughly the same level (red Resistance Zone). On both occasions the price pulled-back to at least the 1D MA200. That is currently at 13540 and should stay around this level through-out Q1 of 2023. If a similar Megaphone pattern transitions DAX into the new Bull Phase, then we expect the index to have bottomed around the 1D MA200 by the end of Q1 (March) 2023 and then rebound towards recovering its All Time High.
-------------------------------------------------------------------------------
** Please LIKE 👍, SUBSCRIBE ✅, SHARE 🙌 and COMMENT ✍ if you enjoy this idea! Also share your ideas and charts in the comments section below! This is best way to keep it relevant, support me, keep the content here free and allow the idea to reach as many people as possible. **
-------------------------------------------------------------------------------
You may also TELL ME 🙋♀️🙋♂️ in the comments section which symbol you want me to analyze next and on which time-frame. The one with the most posts will be published tomorrow! 👏🎁
-------------------------------------------------------------------------------
💸💸💸💸💸💸
👇 👇 👇 👇 👇 👇
Where to Now? 9th December 2022🖼 Daily Technical Picture 📈
➤ I'm back from my holiday and fully recharged. Since my last technical update, the equity market has made some interesting moves that we need to examine.
➤ Foremost in my mind is of a potential medium term top that has been reached.🔝 I'm using S&P500/SPY as the market proxy. If we look at the market since March 2022, there has been two previous occasions where this scenario has occurred: 29th March and 16th Aug. The VIX fell below 20 and then rebounded higher. S&P500 proceeded to then decline by around -20%. 📉
➤ This scenario has just played out with the peak on 1st Dec. VIX has bounced higher after falling below 20. IF history repeats/rhymes, we are looking for another 20% drop. 🙀 That would take us down to 330/3300 for the SPY/SPX500. Each drop occurred over a two month period. That would mean both an ugly end to this year and start of the next.
➤ For this to occur, the market will have to counter both the Christmas rally and a historically bullish January. Readers would point out Jan this year as the perfect counter example.
➤ I currently hold a -25% short exposure. The maximum portfolio exposure is +/- 200% on capital, the level of highest conviction.
➤ Conclusion: History does rhyme...but is it the Bullish or Bearish rhyme?
DAX 30 Big PictureThe DAX as a ZigZag correction .
Rules of the ZigZag correction .
1. Wave A must be an impulse or Leading Diagonal Triangle ✅
2. Wave B must be any corrective pattern (ABC) ✅
3. Wave b does not correct wave A more than 99% ✅
4. Wave C must be an impulse or Ending diagonal Triangle ❓
5. Wave C must be at least 70% of wave B from a price perspective ❓
6. Wave C fails extremely rarely (strong wave C) ❓
Current course .
The DAX formed a Leading Diagonal Triangle since the beginning of 2022, which can be represented as an ABCDE or 12345 wave.
The DAX was able to break out strongly from the Leading Diagonal Triangle in recent weeks (since October), forming an abc correction.
We bounced off the upper trendline.
Further course
In the last days, the DAX shows first weaknesses and we assume that the DAX has already formed its TOP and now another downtrend follows.
If the assumption of the ZigZag correction is correct, now the DAX should form another 12345 structure to the downside, which should hold in the trend channel. There is also still the possibility that the DAX makes a final uptrend until about just above the upper trend line and only then crashes.
Depending on how the economic events will develop, we see 2 correction scenarios as likely:
1. the German or European recession comes harder than currently assumed and the DAX corrects below 10,000€.
2. the recession can be halfway cushioned and thus the financial market calms down faster and the DAX forms a bottom at around 10,500 to 11,000€.
We currently see the first possibility as more likely due to the economic environment. Interest rates will not be lowered in the foreseeable future. The real estate sector is under massive pressure. Many companies continue to struggle with the huge cost of energy and capital, and a large number of companies are still highly overvalued.
A perfect sentiment for a bear market to continue for another 6-12 months.
We will keep you posted!