Dax Technical Analysis 03/11/2016

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Good morning traders!

Markets are still a little bit spooked (okay, I know that I am 3 days late with that pun) with the realisation that Trump is actually doing pretty well in the polls. It’s a pretty damning outlook if he does manage to get in. I actually kind of like Trump, he’s entertaining but I personally don’t think he has enough political skill to be president, not even nearly. I accept that his business acumen and corporate politics game is strong, I accept he has a strong character and has built a successful organisation, but if his campaign is centered around running America more like a business then I can’t help think he should be looking for a role as Secretary of the Treasury. Do people honestly see him as being a good Commander-in-Chief? Chief Legislator? Chief Diplomat? Come on, absolutely not, surely. I appreciate that Clinton is not much more popular, in fact I really don’t particularly like her as a person at all, she’s morally bankrupt, but her fundamental political skill-set is so much stronger and surely ability is more important when deciding on one of the most important and influential positions in the world. Just my opinion.

Right, moving on (I am sure I’ll get some emails from people disagreeing with me, that’s fine)

Right, Dax, what the heck are you playing at? Massively bearish daily candle yesterday, the last two days have been really good for bears. I have a few traders in my group who have done well and are still short, one in particular is over 300 points up on his trade and still holding (as far as I am aware). So what do we need to look out for:

Bears

Great times for bears at the moment, because your favourite word is affecting the market. Uncertainty. So you are definitely the favourite right now. If you are not already short, it’s probably a bit late to get in now. There is room to move lower, towards 10250 and maybe 10185 but we are approaching the daily 200 EMA and we are hovering around the 10350 horizontal support which will slow down your progress.

Watch for a decent break under 10335, a strong candle on the m30 or H1 to confirm that the 10350 level has been taken out.

Potential entries for a short entry include 10400, 10450 and 10500

Bulls

You’ve been on the ropes for a while, receiving multiple fake divergence signals and trying to catch a falling knife when picking the bottom of this move. The market is bearish so you are the underdog, but 10350 is a much strong support level than those we’ve seen over the last week. So there is a good reward:risk opportunity developing. We have seen a double bottom on the smaller timeframes, SPX is looking to break higher and Gold is looking to break lower. The decision is how far to ride a move.

It may be short-lived because the Trump vs Clinton new releases (pre-election) are going to increase and of course this raises uncertainty and that favours the bears. But in terms of targets, same as the above 10400, 10450, 10500.

Technical Analysis

On the daily chart, we have broken through the Kumo cloud with two strong bearish candles and now find the daily EMA 200 just below us in between two major support levels 10200 and 10350, so if traders were going to look for a place to buy or take their profits, I would imagine that this could be a common place to do so.

On the H4 chart, I am watching the development of the oscillator as it has just printed the lowest level since September and if it does begin to point up and recover from the oversold zone, it could wake up a few algos and create a bit of bullish momentum.

On the H1 chart, we are right on one of the major support levels and I am looking to see if it holds.

On the m30 chart, a child could tell you the short-term trend, it’s pretty clear. 10350 is holding for now, despite a couple of tests to break lower. A bounce from here opens up an opportunity for bulls. Using a Fib retracement, bulls could look to target the 10488-10585 zone with stops under the recent low.

Dax Support & Resistance

KEY LEVELS
Daily R210566
Daily R110473
Daily Pivot10403
Daily S110311
Daily S210241
200 Day EMA10308

Dax Charts

01-dax-daily-chart
01-dax-daily-chart
02-dax-h4-chart
02-dax-h4-chart
03-h1-dax-chart
03-h1-dax-chart
04-dax-m30-chart
04-dax-m30-chart
05-dax-m5-chart
05-dax-m5-chart

 

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