Dax Technical Analysis 03/12/2015

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Good morning traders!

ECB MEETING

The ECB is expected to announce further easing measures to boost the economy as deflation still looms. Estimates of inflation came in at 0.1 percent, lower than the forecasted 0.2 percent. The core reading excluding energy and food also disappointed with a 0.9 percent versus an expected 1.1 percent. Super Mario has pledged to do what “he must” and additional measures (if any) will be announced today.

Thanks to various reports I have read, I can summarise today into three main scenarios and options for Super Mario and the team. (12:45GMT for interest rate and I think 13:30GMT for the press conference):

1) Do nothing. The ECB has not been the most proactive of central banks, perhaps because the union is formed by 19 nations and the final decision can take time. There may be some decision paralysis, although it has to be noted that the biggest voice against further QE, Bundesbank Governor Jens Weidmann, has not been quite as vocal lately.

2) The Full Monty. The ECB has three tools it can use to stimulate the European economy. It can lower the discount rate deeper into negative territory, extend the timeline of the current bond-buying program and finally increase the amount of the program. There is a possibility the ECB will use all the tools at its disposal on Thursday.

3) A Mixture. Given the commitment that ECB President Draghi has expressed in his latest interviews and press conferences action is expected from the ECB. The exact mix of monetary policy actions is up for debate, as some of the tools would require internal rules to be modified.


 

DaxTrader Update

I think there is not much point analysing the technical patterns in great detail today, because the outcome of this meeting can override everything and provide the new fundamental direction. I am Bullish, I am expecting there to be a further rate cut and an expansion of the asset purchase programme. But that’s just my opinion and I might be wrong.

Also, I need some willing volunteers for providing content for the daily reports. If anyone is interesting in contributing as an analyst, please let me know. Running this website on my own with two other jobs and being in a band and trying to keep a girlfriend happy is demanding and staying up until 1:30am every night is not healthy. My thoughts are to feature the analysis of a couple of volunteers every week to provide content for the daily article (perhaps for a Tuesday and a Thursday article) to share the workload. Any takers?


This morning I woke up to a 3% swing on my account equity as my Dax swing trade went from -175 points to now +15 and my two EURUSD trades equally gained. So that was a nice surprise.

The current daily candle is looking aggressively bullish, already catching up with yesterday’s candle but as I type this message we have reached the 61.8% fib of the recent swing and I wonder if we react here or just push on through and continue higher. We are above the 34 period hourly EMA and approaching the 11,330 could be a good level to watch as a bear.

For today, my advice would be don’t trade! Get out of your trades and wait, speculating on the decision and hoping for an outcome could work, but will also likely cause your blood pressure to rise too high. The potential volatility for today is huge! Am I going to take my own advice? Probably not.

Dax Support & Resistance

KEY LEVELS
Daily R211427
Daily R111269
Daily Pivot11173
Daily S111015
Daily S210919
200 Day SMA10705

Dax Charts

06 m5 Dax Chart
06 m5 Dax Chart
05 m30 Dax Chart
05 m30 Dax Chart
03 H4 Dax Chart
03 H4 Dax Chart
02 Daily Dax Chart
02 Daily Dax Chart

 

12 thoughts on “Dax Technical Analysis 03/12/2015”

  1. Roger

    Nice possible bearish Triangle entry setup forming watch 5 min chart for bearish candle entry and stop , target 10963.

    1. Roger

      What a day ! Mario is not so super says the market. I think all would agree we are now bearish ! We are due a cyclical resistance on the weekly chart and this could be the start of another visit to the 9000’s or maybe the dax will surprise us again !

      1. Roger

        Hi Dan I made about 14% on my account over 10 trades ! I know from past experience that I will likely lose it tomorrow. So going to turn off my computer and do something else. This could well be ” the big one” for all the stock indices I feel. Let’s see.

        1. Dan

          Excellent Excellent !
          You definitely have earned the right to log off and rest and that is what a trader should do after a significant win. I should also take my advice. My outcome was very small basically I did not trade only a small scalp. Even though the market was setting up days before on weakness, my analysis got lost between how things have been so bullish to making me worried to go short. Trading alone is a huge disadvantage to me, my mind wanders and cannot stay clear and focused some times. Even though I really know so much about price action. It is my biggest hurdle, my way of thinking.

          1. Dan

            Might have some thing here, ” I have or look at too many signals over too many time frames at the same time” Hence the conflict and missing out on market moves.
            Time to dig deep and fix

          2. Roger

            Yes Dan. It seems we share many of the same weaknesses. As I have discovered and no doubt others before me, being successful at this game (and I am not there yet) is really about conquering my emotions. Mainly despondency (fear) and worse still euphoria (greed). I know what I need to do, take a system that suits my personality, is relatively simple to understand and apply and then hardest of all stick to it through losses and draw downs to gain the big wins when they come. Trading is a lonely occupation and one that most of us are not adapted to especially if we face daily scepticism from those close to us who I find are quick to make uninformed judgements on it being a worthwhile occupation ! I am happy to share the system(s) I am following if you’re interested.

  2. Dan

    Thanks Roger…..Yeskeeping emotions in check.and more so the patience. I am finding out you need unheard of patience to play properly. However if I trade small 1-5.00 per point that helps keep things real. I have been in positions of 300-500.00 per point and all common sense goes out the window. You can’t even close as the PnL is raging 1000,s here and there. These were RARE occasions but that is not smart trading, and since then that money is gone anyway. I know price action very well I can advise like a pro but can’t take my own advise, If I knew who or where to go to talk to a trading psych I would contact them. Actually want a trading partner that has experience so that we can cross check each others thinking to arrive at a sensible plan for the session. Believe it or not being accountable to some one else works. Happy to chat to anyone about trading and it’s pitfalls dline@iinet.net.au

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