05-02-2018 Dax Technical Analysis

With a near 1000 drop in the last two weeks, we can comfortably say that the DAX is on the ropes. Ideas around a full 10% correction would suggest that 1360 points are not unreasonable. This morning FXCM gapped lower by 92 points, even the FTSE gapped lower (by 24) so the slide is still in force. It was a grim week last week.

12400-12500 seems to be a popular target for shorts and the common question remains:

When does a correction become a reversal?

05-02-2018 DAX News

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Coalition talks pass deadline without a deal. Talks between Merkel’s party and the SPD passed the midnight deadline without an agreement Merkel says it is not yet possible to say when the important issues will be resolved. These difficult negotiations are creating further uncertainty.

There seems to be a lot of scared chatter about the effects of monetary policy tightening at the moment. With the Eurozone ‘strengthening,’ it would appear the QE path is coming to an end. It’s crazy to think that this time last year, many of us were of the belief that the Euro was dead and buried.

Also, surely I cannot be reading this correctly, but are US bonds seriously becoming more popular again?! I fear for the developed world if they are.

 

05-02-2018 DAX Charts

Daily Chart

We can clearly see that we have broken out of the major bullish fork, straight into the more recent bearish fork and so the median line of this more recent fork is the most obvious target.

Hourly Chart

The expanding pivot support is being tested at current levels. The entry to get short was the kiss goodbye from the underside of the line shown in this chart.

Dax Signal Indicator

Here’s an indicator I built recently showing outside bars (bars that are both higher and lower than the previous bar) – an indicator that “something’s going on”. The arrows indicate the ‘Wide-range’ Outside Bars, so these ones are larger than normal and are good indications of something serious is going on.

If you are interested in this indicator, it will be made available soon (it’s written for MetaTrader 4)

Dax Trading Signals

05-02-2018 DAX Key Levels

KEY LEVELS
POC *12850
Value Area High *12870
Value Area Low *12766
14 Day ATR175.25
200 EMA12685
50 EMA13158
Daily R213092
Daily R112901
Daily Pivot12798
Daily S112606
Daily S212503
*These are FXCM numbers, not futures numbers. Please be aware that FXCM can often be 5-10 points higher than futures prices

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