Good morning traders
Crazy gap yesterday of 300 points meant that the market was up 3% and showed no signs of wanting to close it. I saw a comment in the DaxTrader group that said ‘let’s wait [to see] the next Brexit poll for everything to reverse’ and that made me laugh, because at times like these, when sensitivity is high, these polls can create incredible volatility.
Today we had the German ZEW index print a much stronger number than predicted, so you expect this to have a bullish impact and it opens the door to breaking the 10,000 again. Price does seem to oscillate around the 10k barrier regularly, so I would not be surprised if it does it again. We have a resistance zone between 10050 – 10100, so this could be a good target for traders looking to go long for a few points.
On the daily chart, the general trend is not obvious, but with 5 bullish days on the bounce, we are short term bullish above 9500. If 9920 goes, we could be looking to retrace some of the recent bullish move and if so, many bullish traders will assume that 9750 will hold as support and look to buy from there. Intra-day a break above 10000, assuming it is not a fake break, could reach the resistance zone mentioned earlier, with 10075 looking interesting as a target. The 200 EMA will provide some potentially strong resistance.
For the bears, intra-day if we break below 9950, there is not a lot of support until 9925 and that goes we open up a move to 9880 or 9850. The gap we opened yesterday morning looks like it’s pretty safe, technically, but if we get another high-profile poll suggesting brexit, then it could open up a decent short trade opportunity.
It’s still a coin flip trading the market this week and it’s possible that today and tomorrow may begin to slow down (unless, as I mentioned, we receive a poll).
Dax Support & Resistance
|200 Day EMA||10116|