Dax Technical Analysis 09/11/2016

Good morning traders!

Yet another surprise in world politics. Donald Trump has become the 45th US president after a convincing victory over Hillary Clinton. The victory became clear after Clinton’s campaign chairman came on stage, alone, to tell people to go home and then shortly afterwards Clinton phoned Trump to concede. The key points were the republican vote in Pennsylvania and Florida but probably more interestingly Ohio, the state that has voted for the winning President nearly every time in history.

So Trump is the President. We’ve gone from the first Black President to a president who received public support from the KKK. Should we congratulate or commiserate? I found it funny that a lot of voters comments could be summarised by saying “well, they’re both shit, but Trump is just less shit, plus I see him on TV a lot so that’s good right, USA, USA”. Despite the magnitude of the event, the markets have been relatively subdued. I appreciate that a gap lower of 500 points (with my broker at least) is pretty significant, but it could still have been a lot more volatile. But anyway, I am bored of the US election, it has kind of blocked me from trading recently, so let’s just draw a line under it and move on and look for some opportunities.

I don’t have a strong fundamental outlook just yet, so we will look at the technical analysis alone.

Dax Technical Analysis

On the daily chart we now have a large tail on the current day’s candle after the initial open gapped down to near 10,000. There was an almost immediate recovery and we have pared the majority of the early losses, perhaps now we are looking for a balance point. A close above the daily 200 EMA could be interesting as bulls will have defended price during volatility. A close below the daily 200 EMA is significant because the candle will be heavily bearish. It does look a little bit like a bear trap or a sweep to clear out the longs.

The H4 chart shows a touch of the lower band (Moving Average Envelope) followed by a rejection, but the oscillator is overbought presenting a potential opportunity for a short trade with a stop above the recent high.

The H1 chart is not easy to read for the moment, because it’s still digesting the initial gap and subsequent recovery rally. Once we have found a balance point, it may be easier to look for next significant levels.

The 5 minute chart shows the size of the initial gap on open this morning, we actually touched the daily S4 (pivot point indicator), a level not often seen, and are now currently trading (at the time of writing) just a couple of points under the daily S1.

I suspect that price action will begin to settle back again again soon as more traders begin to come back into the market and resume positions.

BEARS

Selling from 10425-10450 and higher targeting 10200-10275 is an interesting set up, stop losses may need to be a decent size (perhaps above daily pivot) to allow for a stop sweep between 10450-10500.

BULLS

Wait for a balance point to be found and a base to build, perhaps closer to 10275 could be interesting as confidence begins to return and a decent swing opportunity could be had.

Dax Support & Resistance

KEY LEVELS
Daily R210641
Daily R110588
Daily Pivot10500
Daily S110447
Daily S210359
200 Day EMA10312

Dax Charts

01-dax-daily-chart
01-dax-daily-chart
02-dax-h4-chart
02-dax-h4-chart
03-h1-dax-chart
03-h1-dax-chart
04-dax-m30-chart
04-dax-m30-chart
05-dax-m5-chart
05-dax-m5-chart
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