2024-11-06 - priceactiontds - daily update - daxGood Evening and I hope you are well.
tl;dr
dax futures - 1 daily bar to almost engulf 2 months of price action. The rejection above 19600 was strong enough to expect that the highs are in but I am not convinced. I highly doubt dax will be flat or lower while wallstreet is doing an early Santa rally on coke. I am much more bullish and expect 19000 to hold. Decent 1h bear bar that closes below 19000 can convince me to turn bear.
comment: Tough to ponder what to make of big up on US markets while dax sold off hard to get below 19100 again. I do think 19000 is huge support and bulls are favored but 6 consecutive daily bar closes below the ema is pretty bearish. Will continue to look for longs around 19100 until 19000 is clearly broken and we go down.
current market cycle: trading range
key levels: 18900 - 19700
bull case: Bulls got above 19600 which was an amazingly fast up move but the sell off was even better. Bulls have still no reason not to buy this around 19100. It has been profitable for a month now and given price action on the other markets, I am having a very hard time to be bearish. Bulls need to get above 19300 for more bears to cover and then they can try to go 19500 or higher again. Most outrageous target of 20000 is still on the table.
Invalidation is below 19000.
bear case : Bears see the perfect head & shoulders pattern on the daily chart. Also the huge rejection above 19600 and the 6 consecutive closes below the daily ema. Bears have all the arguments on their side to try and break below 19000. Is the current market environment good for them? I don’t know. It’s not that often that major western indices converge that much but let’s see tomorrow. Measured move down brings us to 18300. Make no mistake, I absolutely, 100% expect that price to be hit again this year. This rally is nothing but coke fueled euphoria based on hopes and dreams the next US government will wave a magic wand and fulfill wallstreet’s dreams.
Invalidation is above 19700.
short term: Bullish as long as 19000 holds. I think we can print 20000 before this corrects big time. Below 19000 I am wrong.
medium-long term - Update from 2024-10-19 : 20000 is the goal for 2024, if bulls do not get it until year end, it will probably not happen for the next 5-10 years. This market is beyond overvalued and will drop 30-50% in the next 5 years. I have no doubts about that. That fact should not be relevant to your trading at all.
current swing trade: If 19000 holds tomorrow, will do a swing long and hope for a homerun to 20000.
trade of the day: Wild swings in both directions. Globex was obviously as bullish as it gets but changing to full bear mode on EU open and hold to 19100 was tough.
