Dax Technical Analysis 04/10/2017

Dax Outlook

The Dax has not looked back since breaking out of the channel rotation from a week or so ago. It has broken through previous support and broken through the measured move target (750-800 zone). The most obvious target now is the all-time high and then onwards to 13k. Progress beyond these levels is also realistic when you consider the Nikkei and the majority of the US indices are also rallying aggressively too.

We have been reluctant to buy high, but the levels of interest are below in the table. Given the strength of the momentum in this move, the pullbacks have been non-existent, which requires either patience (which is the route we have taken) or more aggression with the entries (which is not always the wrong strategy). The risks to taking a long right now are plenty. We are close to an all-time high and a major fork expansion (upper median line parallel) as well as the measured move targets from various balance points that we have discussed previously. Not to mention the overvalued nature of the market. But all too often, we sit and wait for a pullback that doesn’t occur and as a result, become passive spectators to a market that is moving. So right now, we run the risk of buying high and entering a FOMO trade.

We personally will continue to exercise patience, but today we watch for the initial move in the first 20 minutes. Will we see a gap higher and will that present a quick short-term move? Then we will watch for a break of the IB (opening range) for clues on the direction for the day. As for swings, we haven’t seen any, the move has been vertical. One way traffic. So watching price action will be key to find aggressive spots. We are unlikely to fade this market (short) given the strength of the trend, until we at least see the minor swings broken.

Dax Webinar

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Dax Levels

POC (Futures)12860
Value Area High (Futures)12878
Value Area Low (Futures)12843
14 Day ATR75.34
200 EMA12076
Daily R212962
Daily R112936
Daily Pivot12890
Daily S112864
Daily S212818
*Please be aware that FXCM can often be 5-10 points higher than futures prices

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