2024-01-01 - priceactiontds - daily update - daxGood Evening and happy new year.
comment: Xetra (futures are currently trading 143 points higher) closed the year 2024 below 20000 and bulls could not get a decent bounce during the most bullish days of the year. My base assumption for the next days/weeks is a bigger second leg down which will leave no doubt that this bull trend is over and investors would be lucky to see 2025 close near 20000. There is a much greater chance of a decent bear year where market corrects a big chunk of the past 2 years and then moves sideways for the rest of the year.
current market cycle: trading range
key levels: 19600 - 20200
bull case: Very weak price action by the bulls the past week. We have a big open gap between 20032 - 20241 and until bulls close that, bears are in control. If bulls manage to close above 20000 again, the odds of closing the gap will be good. We have the start of 2025 and you never know which side it will turn. Both 2023 and 2024 saw huge inflows and the start of the year also marked the low of the year. Bulls hope this time will be the same but I have big doubts about that.
Invalidation is below 19800.
bear case: Bears are in control. Decent two-legged pullback after the sell-off, we are trading below the daily 20ema and the bull bars last week were bad buys for the bulls. Bears expect a bigger profit taking to take place over the next days and another leg down to at last 19200 or even 19000. Their next target is a close below the breakout point 19660 to confirm the first leg and I doubt many bulls will hold long below 19600 because we could go and test the bull trend line around 19200. I can’t see this breaking much below 19000 for now because that price was tested so much between October and December, that we will likely go sideways there for many days.
Invalidation is above 20150.
short term: Neutral around 19900. Bearish below 19800 and uber bearish below 19600 for 19200 or lower.
medium-long term from 2024-12-22: Any short near 20000 is reasonable if you can hold for another 1000 points higher. 17000 is much more likely than 21000 though. My first target for the next months is 19000, followed by 17700ish and ultimately down to 16000-16300 in 2025.
current swing trade: None
trade of the day: Market was closed
