A little later than expected today as I had to attend a meeting, on my way there this morning I had to clear frost from my car windscreen, a clear sign that ‘winter is coming’, it’s taken a while.
Yesterday we had a Marabuzo candle on the daily chart which can sometimes provide pretty significant signals for a continuation move. Many traders tend to wait for price to retrace to approximately 50% of the previous day before looking to get in again, so this presents an opportunity. The close on the daily chart yesterday was significant because it broke below recent support of 10600.
There is a lot of support to break through, so I suspect the route to a lower price could be turbulent, so bears will need to pick their spots carefully. We found support this morning at 10550 with a cluster of tailed-candles appearing around 8am GMT alongside bullish divergence (visible on the 5m chart), the reaction was a 75 point rally up to 10625 and a pullback to 10580 which seems to have provided a good balance point.
Now we are looking for a decent break below 10575 to continue the move lower, or a break above 10625 to continue the retracement higher. For today I am bearish, but very interested to see how we close today.
Dax Support & Resistance
|200 Day EMA||10362|