Dax Technical Analysis 10/12/2014

Current Bias: Bearish, with potential bounce at previous resistance (September)

Support: 9835 9810 9790 9783 9687

Resistance: 9885 9900 9932 9981 10083

Best trading method today: breakout

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I have not been available for much today so apologies for any delay, today’s article will be slightly retrospective providing a summary of today’s trading with an outlook to the rest of the evening and perhaps tomorrow.

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vwap bands & breakout zone
VWAP bands & breakout zone

So today we have been consolidating yesterday’s losses and trapped in a range waiting for a breakout of either below 9835 or above 9885. Our vwap bands were starting to pinch in and the MACD was forming a wedge as well, suggesting that when a breakout came it would be quite significant in terms of day trading.

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We had the breakout and have taken out the 9835 to the downside for 50 points or so and bounced from the daily S1, retracing around 50% of the move down from the original vwap at around 9870. We are threatening a further move to the downside from here and have not quite yet managed to retrace all the way back to vwap.

Volume Profile
Volume Profile

EURUSD and USDJPY are still interesting charts to watch as are SPX, FTSE and EUROSTOXX because the Dax is sharing similar moves (inverted moves with EURUSD).

At the moment the trend is bearish and the trend defining level is 9912 so under this level I am currently bearish. You could technically say that the low today is a new lower low, but I suspect we might go down and retest that shortly perhaps carving out a more significant low closer to the daily S2 for today around 9700, perhaps by tomorrow.

There is currently  low volume pocket between 9826 – 9840 which currently proving resistive, but could fall quickly if we breach that area. So far we have tested the area twice and both times been rejected.

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Trade Setups

There are a couple here:

EURUSD
EURUSD Trade Setup
Dax Trade Setup
Dax Trade Setup

Technical Analysis Video