Dax Technical Analysis 06/10/2017

Dax Outlook 06/10/2017

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We are currently long after a trade was opened yesterday (stop at breakeven, so no risk on the table) and targeting a break beyond 13,000. It may seem crazy given that we are at an all-time high, but the trend is still intact. Whilst I appreciate that many traders are fading the market, we have not really broken any major or minor swings. So there is no point in guessing and hoping that the market will go down, just because it’s unusually overvalued.

Yesterday we broke to another new high, making 12894 the new minor swing low. At the time of writing, the price action was hovering around 12986 on FXCM and around 9 points behind that on futures. I would expect that we will get some kind of reaction just above 13,000 as many traders park sell limit orders up there.

The trading range yesterday was relatively compressed (55 points, compared to the ATR of 77) so the zome between the daily R2 of 13022 (around 13013 on futures) and the daily R3 of 13077 (around 13068 on futures), will be a popular choice to place a limit order. This is great for our trade because our profit target is there.

Potential Entries

Aggressive longs today would be in the 12954-12964 zone, as this would be the zone around the POC from yesterday, the IB high from yesterday, the previous all-time high and of course the daily pivot. Aggressive shorts today would be in that zone mentioned above and I’d be looking for 4.5/5 to 1 on my reward to risk calculation. That makes a trade tricky because it will either mean a small stop (which can easily be taken out, given the current momentum) or a wide profit target (which can easily be missed given the market’s reluctance to pullback). So we continue to favour upside, given the structure of the swings.

On Twitter, there was an interesting article (which I can’t find now for some reason) regarding the Australian index, which is trapped in a very tight range. Unusual considering the general trend of the other major indices. That one is worth keeping an eye on, add it to the watch list.

That completes the Dax Outlook 06/10/2017

Dax Levels

POC (Futures)12943
Value Area High (Futures)12953
Value Area Low (Futures)12930
14 Day ATR77.96
200 EMA12093
Daily R213022
Daily R113002
Daily Pivot12968
Daily S112948
Daily S212913
*Please be aware that FXCM can often be 5-10 points higher than futures prices

Dax Charts


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