Good morning traders!
We have broken back through previous support/resistance and held above 11,300, the bearish trend has definitely been broken and the weekly candle is looking like a strong reversal signal, however in the short term we are approaching the top of the 4-hour fork and initial optimism surrounding Greece was dealt a blow following comments from the IMF that no progress was made in the talks. Is the move up a short squeeze or a bull trap or a breakout?
The yo-yo continues to move and I saw and heard a lot of people get chopped up yesterday. It’s a brutal market.
The Bund rally yesterday was one of the biggest we seen in a decade, the German government is preparing for a Greek bankruptcy and time is running out of the deal timeline.
I am no longer in my long Dax trade, I got stopped out for a (very) small profit. Hard not to be annoyed with that one because I was heavily in profit at one point and just sitting back watching it climb, dreaming of the cold beers I would be sipping on the holiday it would pay for me, until I got slapped in the face as IMF walked out of the talks. The joys of greed. Never mind, there are always more opportunities.
So what now?
Well we break and hold above 11350 would be a strong indication that we are continuing towards a resumption of the original bull trend from earlier in the year, but there was a lot of volume traded around this area yesterday and it will likely provide tough resistance. A break below the yesterday lows can open up 11200 perhaps even 11160, especially as we have gained 600 points in the last two days and most often we give some of that back before climbing again.
If further negativity emerges from the Greece talks then I can more losses and another retest of the recent lows.
Dax Support and Resistance
|200 Day EMA||10816|
The weekly candle is looking strongly like a reversal candle with deep losses being quickly recovered and moving inside the previous candle, today will be interesting to see how it completes.
Four hour chart showing us approaching the top of the fork
If I had to make a prediction, which I am not likely to trade, then I think we break towards 11220 before climbing higher.