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STOXX50 trade ideas

ESTOXX50 - Extremely Bullish... and overboughtIn all aspects Eurostoxx50 Index is extremely bullish, while US mkts are not so much. Last daily candle is a huge Hanging Man (normally a good indication for short term trend exhaustion), daily Slow Stoch is overbought and started to point down, and watch 4 Hrs ADX, which is close to 50! ADX is a measure of trend's strength, but most of the time when it is so high, market starts a correction. How to play the correction? There are two ways: you either try to sell it in a spike ard 3220-3240, or you watch for the 4 Hrs Kijun line and sell the break below, which in line with daily Tenkan and horizontal line means a sell below 3175. In any case do not allocate more than 0,5 unit on this trade, as again, at the moment it is an initial counter trend trade, and we need to see more signals to be confident with building bigger shorts.
FX:EUSTX50
by Kumowizard
5
ESTOXX50-Show me the way to the next whiskeybar /love me 2 timesWhile the weakest chain is clearly the DAX Index, the broader European equity index actually somehow not yet that bearish. However I think this is a classic example what not to touch as a trend trader, until one day it looks like a buy and the next day seems rather a sell. All in all it is a consolidation, with flat and thin daily Kumo, confusing daily MACD, and also a super low ADX and choppy zig-zag DMI on the 4 Hrs. 4 Hrs Ichimoku is not giving any indications either, except one: leave it alone until it trades in the triangle, and in the range 3050-3100. My longer term bias is generally bearish for equities, so if anything, I would sell the tops or would buy more Put options for May maturity, but only a decisive break below 3000 could bring here a real and massive bearish reversal. Until we can decide, please enjoy: www.youtube.com
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by Kumowizard
ESTOXX50 - BULLS BACK IN POWERI have to admit, I do not have too much "luck" trading equities this year. My timing is not very good, and my mind is too much influenced by non technical factors, which tend to block me from going long on equities by technical signals. Last sell round worked well on this index (not like on SP500 wichi can not drop in any circumstances), but now looks bullish again. The reason I do not mark this post as a Long recommendation is that I clearly do not see much upside on this move. I rather have the feeling, that 3150-60 will stop bulls again. There are some negative divergences both on Daily and 4 Hrs time frames. On the daily price is floating in a pretty quickly tightenning ascending triangle. The next real heavy move will take place whenever price breaks out of this. Will it bring a correction and the end of the multi year bull mkt, or will it be the start of another 10 % rally? Hard to decide. But as I said at the beginning of this post, I am always a bit afraid of longs, so I will probably rather buy Long Put options if we reach 3150 level.
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by Kumowizard
ESTOXX50 - Long term bearish sideaway, short term floor hereNext one which behaved very well. Please see post and reco: All the negative divergences stopped the bulls, and caused another wave of correction. Puts and outright shorts (if you sold on that spike or in the small breakdown) worked pretty well, but since these levels ard 3050 are still very supportive for short term, I suggest to close bearish positions for some time now. However going long I do not think is a good risk reward. Looking at daily chart: DMI bearish, MACD negative divergence still persist, Slow Stoch is down (still not oversold), but px arrived to Kijun and close to long term trend and the Kumo. So it has some chance to pop up from here again, however the future Kumo and the position of the Chikou Span on the daily chart suggests it will still stay choppy with higher volatility, and move sideaway in a wide range for next few weeks. (might be good for daytraders, not so good for me as a trend trader). Levels to watch: 3120 - 3150 for possible top again (Strong resistence), 3020 - 3050 for the floor (strong support). If it closes below 3000, then it will be an armageddon for the Bulls. One more note here: As you see on 4 Hrs chart Kumo and Kijun resistence now is ard 3100. One may ask why I did not recommend a short from there. Well Ichimoku is a trend following system, so in case it will really meet my expectation and moves sideaway, these levels will be easy to cross in both direction. What I recommend is to set your px alerts at 3100-3110, and start looking at px action and plan the strategy when we reach it.
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by Kumowizard