I was buying into most of yesterday’s move down and this is always the problem with a trend following system, when the trend changes temporarily, you give back some gains. So for now I am waiting to see if this is just a pullback from the wider bullish move, or whether it’s more than that.
We are currently (at the time of writing) in between the daily S1 and S2 and looking like we want to continue to move lower, the question is how much lower will we go? If we look at the FTSE as an example, the FTSE has completed a 50% retracement of it’s recent swing, so if the Dax was go ahead and complete a similar retracement, then we can expect to see something closer to 10075-10100, which happens to be previous resistance, so that would make sense for me.
Short-term, looking on the 5-minute chart, we are riding a bearish channel lower and will likely find resistance around 10200, given that is was previously supportive last week as well as today. I would be surprised if we took out 10150 today, so a move down to 10075 may not happen just yet. The retracement in global equities ties in nicely with the bounce from Gold at 1200.
So bears are in control today and I can’t see many long position trades working out just yet.
A good bearish template for the Dax on the DaxTrader RSI system would be to set the RSI levels to 60 15 instead of 70 30. Periods between 8-14 is good and time frame is your choice. A good target could be the Average True Range (ATR) or perhaps a multiplier of that, somewhere between 1-3 is good. Come and get your £10 trial, a new month has started so you can enjoy the whole month and get £10 off the final software if you decide to go ahead.
Dax Support & Resistance
|200 Day EMA||10152|