05 m30 Dax Chart

Dax Technical Analysis 23/10/2015

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Good morning traders!

What an unbelievable day yesterday turned out to be and unfortunately there were quite a few casualties who were caught in their short positions expecting a turn around, which didn’t happen. So thank you Mr Mario Draghi for your language which was hawkish dovish (correction) enough to send the markets into chaos in favour of us bulls. I stayed with my belief, despite some grumbling opposing opinions from my analytical peers, that going long would be worth a punt and I am going to enjoy the reward.

Congratulations to the bullish investors who also had long positions and to those who were also short the Euro. I have sat on a position since 23rd September which is now finally starting to follow my analysis (EURGBP short).

Should you go long right now? Probably not, it’s a bit late now, wait for a pullback to at least the daily pivot before considering. I am moving my RSI indicator to a dip buying template (85 35 levels) and looking to maybe add another trade. We have taken out a considerable resistance level at 10,500 and closed above it, today we check for follow through and momentum, I suspect we retest the 10500 at the very least, perhaps towards the daily pivot and 10,400 and I would be surprised (gobsmacked) if this rally pares its gains or turns into a bull trap. So I am looking to go long again from there somewhere.

I am still interested in placing a USDJPY position trade on soon, I am preferring a long position, but I want a better price. I like a EUR short, but already have my EURGBP short. I am very keen on going long a few other European stock markets, but have been reluctant to trade the Italian. I don’t have an opinion on Gold or Oil.

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Dax Support & Resistance

KEY LEVELS
Daily R2844
Daily R110701
Daily Pivot10445
Daily S110302
Daily S210046
200 Day SMA10619
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Dax Charts

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04 H1 Dax Chart
04 H1 Dax Chart
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06 m5 Dax Chart
06 m5 Dax Chart

3 thoughts on “Dax Technical Analysis 23/10/2015

  1. Unfortunately I have to disagree. This Dax rally may carry on a bit further but ultimately it will prove to be a massive bull trap before year end. ECB QE has not worked and any further extension will work even less than before. Equity markets will realise this and heavy falls will happen. The further it rises in the interim the bigger the payday for the shorters. I see November as the month this will start as virtually everyone will be positioned long for the year end rally. Massive earnings misses in the US with such low rates are leading to huge layoffs to keep profitability. I thought time could never be bought but QE has proven with enough money time can be bought! I have bought Dax puts at 10000 on December contracts to capture this fall with a small risk. Congrats on your trade but there was a lot of luck involved with the Draghi speech yesterday.

    • I welcome the opposition, I even agree with the points you’ve made about the feasibility of the QE programme and its effects on the economy in the longer term, and subsequent impact on the markets. I agree the inevitable plummet has been extended and that we will see a slump down the line. I will even accept the congratulations you gave, but ignore the after taste, I don’t believe in luck. “You win some you lose some, just make sure your winners earn more than your losers.”

      Perhaps you could give a bit more detail to the bull trap? What sort of levels do you see the rally ending?

      • I think we have already topped in the DAX on this recent move up. A drop to 10000 does seem unlikely but its very possible. After that probably a year end rally followed by more selling in January to break the August lows.

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