Good morning traders!
What a day for the bulls yesterday!
Greece have backed down and an agreement has been made to continue the Greece bailout, much to the dislike of many lawmakers from the Tsipras Syriza party. Riots broke out, Tsipras doesn’t like what’s happening but claims he had no choice. So more money has been provided to Greece.
It was interesting that almost all the questions from the Q&A at the ECB meeting were about Greece yesterday yet Draghi remained firm that he expected Greece to stay and believes providing further ELA funding to the banks is uncontroversial. Debt haircuts will likely be considered (just not yet) which falls in line with the IMF but against Germany and he dropped further hints about the asset purchase program, specifically about August being a reduced month due to the front loading of May-July.
Overall I think it’s a good time to already be long on the stock markets, but perhaps a little expensive to get in and buy from current levels. So now we wait for the German parliamentary vote on the Greek bailout, can you imagine if they reject it?
However you look at the Dax at the moment, it’s difficult to argue that the bearish trend has been broken and we have turned bullish. I believe many traders are now waiting for a pullback and looking to target the May highs. Going long from current levels will earn around 200 points, but we’d be risking around 300+ making it a silly trade. I prefer to wait for 11500 and target 11800-11900 with a stop between 11200-11350.[wp_ad_camp_1]
Dax Support & Resistance
|200 Day SMA||10908|
I haven’t looked at the weekly chart for a while, but a large tail on the candle from last week with a decent volume spike point to an end to the correction.
We seem to have sliced through the various resistance levels (kumo cloud, 61.8 fib, channel top and previous high) pretty easily but all this has made buying quite expensive from current levels.
We’re approaching the weekly R2