Good morning traders!
The ECB meeting was the major highlight from last week and the ultra-dovish Draghi has certainly made [bullish] traders, like me, very happy. The quote which is being bandied around is:
The degree of monetary policy accommodation will need to be re-examined at our December monetary policy meeting when new macroeconomic projections will be available.
Whilst this comment sparked a buying frenzy on Thursday and Friday, it’s possible that this could setup a collapse if they actually do nothing more in December than simply continue with their original plan of bond purchasing. However if they move into the world of shares as well, there’s only one direction we will go and another ATH will be likely.[twitter-follow username=”DaxTrader54″ scheme=”light”]
As I write the article this morning, I have struggled with my VPN meaning I can not access my charts, or recall where I moved my stop losses to, but I have noticed a small Dax slump on open and I would suspect that today my trades are closed out. I’m delighted with the results and I will be looking for more chances to go long, until we show a clear sign of reversal.
Trading today, I would be watching the reaction to the daily pivot but will unlikely add a trade from there, I think we are still really extended at the moment and would not be surprised to see a pullback this week, if not today, somewhere towards 10,650 initially and perhaps 10,500. I may look to buy from those. We have already reached the targets from the 100% Fibonacci extension (using the 28/9 – 12/10 – 14/10 dates as plot points) so there are many reasons to see a pullback. I personally won’t short, although I am sure there are opportunities to do so, but instead I am looking to buy a dip this week.
There are a number of items on the calendar to watch this week with the FOMC, BoJ and UK 3Q GDP, no directly related to Dax but have their influences.
I closed out my EURGBP short on Friday which I have held for a while and reopened a smaller trade. For those looking to follow my trading account, please go to this https://www.mql5.com/en/signals/121031?p=76nl.
This is a forex only account (with Gold being the only exception) and I will now only trade a maximum of 0.30 lot per trade. Another (much smaller) account will be opened beginning of November for those who wish to follow Dax trades as well as forex and commodities.
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Dax Support & Resistance
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