2024-10-31 - priceactiontds - daily update - daxGood Evening and I hope you are well.
tl;dr
Indexes - October is behind us and markets closed at the monthly lows. Clear sell signal going into November, since this is an amazing bear breakout. Markets are now in search for a intermediate bottom to form a proper channel. Most markets are also at bigger support and we can expect some more sideways to up movement before we get another impulse. That does not mean we can’t print another huge down day on Friday and have the pullback next week.
dax xetra
comment: Monthly chart shows a rejection at the top of multiple patterns and odds favor more downside over the next 1-2 months to have something of a pullback in this bubble. Weekly 20ema is around 18800, so only 200 points lower, which is reasonable to hit over the next days but we can’t expect that ema to be broken too easily. My rough target for November is 18000-18500. Daily chart shows huge bear gap bars and market needs some sideways to up movement soon.
current market cycle: trading range - bull trend is over.
key levels: 18900 - 19400
bull case: Bulls running for the exits and want to take profits before they are gone. 19000 is a decent target for market to take a breather and move sideways to up. Targets for bulls are gap close to 19270, which is also the daily 20ema. 19400 is far but could happend. I can’t imagine anything above that for now. 18900 has to hold, otherwise we see a flush down to ~18340, which is the 50% pullback.
Invalidation is below 19000.
bear case: Bears are in full control of the market after 3 huge selling days. Volume is increasing and xetra has not touched the 1h 20ema since Tuesday. Bears can view this leg down as w1, which already had 3 nested legs down (1 per last 3 days). Some pullback and sideways movement is expected. If bears can keep this below 19300, that would show strength and w3 would accelerate down in that case, since bulls had no better relief. Next target is 18900 and below that is 18800 (weekly 20ema), below that is nothing until 18400.
Invalidation is above 19300.
short term: Bearish but more cautious and only selling pullbacks again. 18900/19000 should be bigger support. Expecting two more legs down in November, rough target is 18000.
medium-long term: Will update this over the weekend.
current swing trade: None
trade of the day: ~19170 was rejected many times and bears had enough chances to get on the short train. 19000 was obvious support and one should have covered there.
