There is now some calm around the markets, perhaps only temporary calmness, but it’s definitely noticeable. Given that we experienced some of the biggest movements in recent years on Friday, the markets are still in the process of digesting what has happened. So I would not be fooled by this momentary slow down, I think the bias for the Dax still has to be to the downside, I think the fundamental picture for the UK, EU and Global economy is still very uncertain and the true extent of the uncertainty has not yet really been understood by many.
We are still heavily oversold and are currently retracing. Since taking out and holding above 9500, we seem to now be looking to target 9750 before perhaps rolling over and continuing the descent. We are short term bullish above the 9550-9570 zone and a break above 9642 is required to continue to the technical trend.
There is a small head an shoulders pattern developing on the 5 minute chart with the shoulders forming around the daily R1 from the pivot point indicator and the head being the daily high of 9642. The neckline would be around 9565. If that pattern plays out then we could see a move down to 9487.
As I write the article, we are currently at 9600 and have found some momentum.
Dax Support & Resistance
|200 Day EMA||10091|