Dax Technical Analysis 12/02/2015

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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.

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Support & Resistance

KEY LEVELSDifference
Daily R210851-99
Daily R110810-60
Value High10770-39
Daily Pivot1075322
Naked VPOC10752-12
24hr VWAP1074834
34 Hour EMA107446
Value Low1072641
Daily S11071261
Daily S210655143
200 Day EMA970812
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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 Daily Chart
Dax Daily Chart

Dax Intra-day Chart Analysis

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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.

Dax Intra-day Chart (30 minute)
Dax Intra-day Chart (30 minute)

Volume Profile

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 Volume Profile Chart (5 minute)
Dax Volume Profile Chart (5 minute)

Dax Trading Signal Project Update

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