Dax Intra-day Chart (4 hour)

Dax Technical Analysis 09/06/2015

[warning]Bearish momentum in play, watch reaction to 11k[/warning]

Good morning traders!

We closed above 11,000 yesterday but with a pretty heavy looking daily candle and momentum is currently strongly bearish. We are now inside a low volume zone based on a 150day composite volume profile that I have mentioned recently and if we take out 11,000, the we could open up the door to 10,7xx.

I think that a lot of people are looking for 10,850 as a target because this would be the 38.2 fib from the Oct-Apr swing, there was also a cluster of trading activity around this zone from February this year. Providing that a ‘deal’ is made between Greece and the lenders I think we may see bulls stepping back in here. The daily 200 EMA is 10800 as well.

A trading friend of mine who regularly emails charts and observations showed me some fork charts yesterday and so I drew one of my own to show an interesting current levels:

Dax Intra-day Chart (4 hour)
Dax Intra-day Chart (4 hour)
[info]Where is the Dax heading? Leave your comment at the bottom[/info]

So I know wonder what reaction we get. Assuming that we continue the overall bearish trend, do we simply continue the momentum of yesterday and move lower, considering that a Monday generally tends to dictate the rest of the week, and yesterday was a heavily bearish day? Do we perhaps retrace some of the losses and settle first, then maybe kiss previous support before resuming to the downside? Does the median line of the fork hold and we bounce back up? It would be interesting to hear your thoughts.

My personal opinion is that I am concerned we may see further downside so I am not trading just yet. I refuse to short the stock markets.

The five minute chart shows we took out the R2 yesterday but held below and failed to retrace much of the loss, highlighting how heavy the selling pressure is becoming.

Dax Intra-day Chart (5 minute)
Dax Intra-day Chart (5 minute)

I have made a slight adjustment to this chart. I have added an 8-period EMA to the charts to show underlying trend and will adjust the signal settings to reflect the trend.

Dax Signals
Dax Signals