Good morning traders
Last night the Dax closed down 45 points on the day at around 10223 as it gave back some of the gains from Tuesday. The evening session produced little excitement as we began to coil up into a tight range and I expect us to initially break that range to the downside on open this morning. Perhaps selling off down to 10200.
10200 was breached yesterday, but rejected fairly quickly when we tagged 10175, we then found support there twice more intra-day so I am interested to see the reaction to that price again this morning. I sent out a Sign up for signals and one of the signals, around 10:30 mentioned that we were creating a wedge formation on the 5 minute chart, and that if we got a break out, it could provide an opportunity for a 25-50 point trade. It broke to the upside for around 30 points. Congratulations to those who grabbed those.
Overall yesterday I had a fairly poor day trading, I hope you guys did better.
I have recently been busy developing RSI Expert Advisor 4, which I am using on my server at the moment, here’s a little peak at the signals it generated yesterday for me (the software should be ready for August, possibly earlier). There were a couple of really good trades there, but earlier in the session I have three losers which took a bite from the profits. One of those things, it evens out over time.
We have opened a gap this morning, so there’s an opportunity to trade that, if we break above 10205, it’s only around 20 points, but it could be interesting. Perhaps traders will be placing limit orders there. I am expecting to see buying around 10185 and for the daily low of yesterday to hold, offering a decent risk:reward setup. I will probably be buying from there, with at least 3:1 reward.
Short term, we are still trapped under the 10370 high, so for a bullish trend to continue, we need to break this level. My only concern about this is that we have not been technically trending since mid April and are actually creating lower highs and higher lows, which is a coiling pattern, suggesting that no trend will continue until after the Brexit results, which would make sense, it’s a massive event. If this is the case, we can still head lower towards 10,000 and still be normal, this particular setup would suit a range trader, or someone using an RSI automated trading system.
I did a poll yesterday on Twitter, to get a feel for where people are, you could perhaps call it a sentiment check for Brexit. Here are the results, I was not expecting this.
Quick poll, what’s your Brexit prediction, in or out? I personally think the remain camp will win. #brexit
— DaxTrader.co.uk (@DAXTrader54) June 8, 2016
Dax Support & Resistance
|200 Day EMA||10153|