Good morning traders!
Lots to digest in the market at the moment. With geopolitical tensions, Greece, our current Dax consolidation from the January rally, and now there are a lot of articles out there about the “divergence” of economic performance and monetary policy among three of the world’s most systemically important economies – the euro zone, Japan and the US which has added another layer of confusion for traders.
I am watching the chart and beginning to think where the next move is heading next. I have to retain the belief that we are still in over-bought territory and the economic factors also weigh heavy, so I believe that we need to find lower levels to begin a continuation rally.
I am currently short with three small positions, expecting us not to be able to pass 10800 on our way towards 10600, perhaps lower.[twitter-follow username=”DaxTrader54″ scheme=”light”]
Support & Resistance
|34 Hour EMA||10744||6|
|200 Day EMA||9708||12|
Dax Daily Chart Analysis
We closed underneath the 8 period moving average which is a nice simple indicator for underlying trend. It’s the first time we have had three consecutive days close underneath the average since the late december/january corrections.
The economic and fundamentals line up, the technicals line up, so I feel it’s a pretty high probability setup. But we are currently consolidating the January gains and exhausting the bullish movement.
Dax Intra-day Chart Analysis[wp_ad_camp_1]
There is a 200 point gap between S2 and R2, and when you consider that some days recently have seen move volatility than 200 points, you start to think we are compressing and readying ourselves for a break. I would like to think the R2 would be very resistive and be surprised if we took out R1.
We are currently underneath the value area high from yesterday and the deviation high sits around the 10800 level, so I favour a move to the downside today, or sideways movement. The VWAP is horizontal and the market profile looks pretty normal. Nothing exciting to note here, except I suspect the buy signal will shortly turn to a sell signal.
Dax Trading Signal Project Update
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