2025-03-24 - priceactiontds - daily update - daxGood Evening and I hope you are well.
comment: Strong bears appeared again, volume picked up and we are down 565 points from the high. Big bull trap and these moves tend to get follow-through. Next big support is 22700 and then 22500 and I favor the lower price tomorrow, anything else would surprise me. The big spending bill is priced in and market could not make a new ath after 3 tries now. Downside has much more room than the upside.
current market cycle: Clear trading range now and market is neutral around 23000. Also the bull trend line on the daily chart is broken
key levels: 22500 - 23750
bull case: Bulls tried the early breakout and it looked promising. Bears surprised me as well and the move was violent enough to go for 500 points down. Bulls have nothing until they recover 23200. If bulls were hopeful for much higher prices, we would have seen them by now. The big bull trend line from 20300 is likely broken now and I do think market has turned fully neutral again. Best bulls can now hope for is to stay above 22500 and continue sideways.
Invalidation is below 22400.
bear case: Bears need a strong follow-through day tomorrow or might find themselves inside a bigger expanding triangle where we could go up to 23500+ again. Today’s selling was a big surprise and these moves trap traders and can have good momentum for a couple of sessions. Bears want the obvious lows of this trading range tested and maybe run some stops below 22500. They absolutely need to close below 22800 tomorrow to confirm the bull trend line break.
Invalidation is above 23200.
short term: Bearish. Bears need to stay below 23100 to keep the strong momentum alive. I’d like to look for shorts near the 1h 20ema. Anything above 23100 would make me neutral and above 23200 I would sit on hands and wait.
medium-long term from 2024-03-16: Germany takes on huge amount of new debt. Dax is rallying hard and broke above multi-year bull trends. This buying is as real as it gets, as unlikely as it is. Market is as expensive as it was during the .com bubble but here we are and marking is pointing up. Clear bull channel and until it’s broken, I can not pound my chest and scream for lower prices. Price is truth. Is the selling around 23000 strong enough that we could form a top? Yes. We have wild 1000 point swings in both directions. Look at the weekly chart. Last time we had this volatility was 2024-07 and volume then was still much lower. We are seeing a shift from US equities to European ones and until market closes consecutive daily bars below 22000, we can’t expecting anything but sideways to up movement.
current swing trade: None
trade of the day: Buying the breakout before EU open upwards was reasonable but you had to be quick to change your mind about shorting it since the move down was violent.
