2024-10-23 - priceactiontds - daily update - daxGood Evening and I hope you are well.
tl;dr
Indexes - Big bear day on most indexes but they did not accomplish enough to flip the markets to always-in-short. I do think the odds of a bullish reversal into the weekend are much greater than continued selling. Many markets are at perfect support and buying this is a no-brainer for many bulls. We still have bullish targets above us (e.g. sp500 → 6000 and dax to 20000).
dax futures
comment: Bulls have waited for this pullback a long time and I highly doubt they will let it go to waste. Very high chance of this being a bear trap and we melt from here. Wait for confirmation before you trade this. We are right at the daily 20ema and the big bull trend line from August. Buying with a stop 19416 is probably risky but could work. Waiting for bears to try 19400 again might be wiser but it depends on tomorrows price action. Last thing I want to do here is enter new shorts. As mentioned in my weekly update and over the last weeks, 20000 is the target and I doubt the market can move significantly lower without touching it. Buckel up for tomorrow and Friday, we will see some big moves.
current market cycle: bull trend
key levels: 19400 - 20000
bull case: Bulls got the textbook pullback to huge support and they want to go straight up to 20000 from here. There is nothing more fancy to say about this. Look at the chart and wait for bulls to come around tomorrow, use a decent stop and let your trade run when it happens. Where would most bulls give up? Tough. It’s probably not 19399. Many will scale in but I do think this should not go below 19300 or the bull case is likely over.
Invalidation is below 19300.
bear case: Bears had a strong day but did not close below the daily ema and the big bull trend line. Zero doubt that bears will give up quickly once bulls come around because they know it’s big support. They made some decent points the past 3 days and most won’t overstay their welcome. If they manage to get below 19300, they would flip the market to always in short and their next targets would be 19100. Very unlikely that will happen but it’s possible, so I think it’s useful to mention.
Invalidation is above 19480.
short term: If we stay above 19400, max bullish for 20000.
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. Right now there is no selling pressure. I am confident that we will hit 17000 in 2025 but timing is more important than price, so let’s not waste brain capital on being bearish for now.
current swing trade: None
trade of the day: Selling 19570 has worked on Tuesday and so today. Obvious resistance.
