Good morning traders!
Did anybody catch the rally yesterday? One strategy that certainly would have caught that rally was the S2 bounce aiming for a return to the daily pivot. At around 8am we had reached the daily lows, just short of the S2 and the 5 minute candles began to show some tails suggesting a bounce. A trade from there to target the daily pivot (which often fails), would have returned a reward to risk ratio of nearly 5:1!! The actual trade moved nearer to 300 points, meaning it would have return 10:1 to anyone who got it, but with that strategy, I generally only aim for the daily pivot.
Entry @ 9580
Stop under the S2 @ 9550
Profit @ 9727
Right now the Dax is a little choppy and there is no clear direction so at times like this, unless a clear range can be traded, I would personally just avoid it. I am waiting for a trend to resume on the EURUSD.
Things to watch today, besides the pivot levels:
- Retracement zone from the swing yesterday providing a possible bullish reaction (m5 chart)
- A break below the daily S1 can take us down to test the low of yesterday (m5 chart)
- A break above the high of yesterday can take us to test the head and shoulders neck line (m30 chart)
- Or complete a 100% extension of the recent move from the lows 10163 (H4 chart)
- Finally a test of the underside of the long standing pitch fork (Daily chart)
Dax Support & Resistance
|200 Day SMA||10536|