Dax Analysis Summary
- There is a low volume pocket above 490 on futures, opened up from yesterday. It is currently acting as resistance but we are yet to test it for the second time. Yesterday we tested VWAP from the underside twice and this failed re-test opened up a great shorting opportunity in the second half of the session. The final quarter of the session would have been a nice opportunity to play a reversion back to VWAP.
- We are currently attempting to break the underside of the daily trend line, but will be caught by the underside of the ‘triangle’ center line. This could allow some short term bullish activity on the route to that broken triangle support (which will become resistance).
- There is plenty of line symmetry on the 2-Hour chart below, with short setups looking the most likely. We have a parallel from the bullish trend channel and a parallel from the first center line we drew a week or so ago.
Dax Webinar Tomorrow!
Join the telegram broadcast channel now: https://t.me/joinchat/AAAAAEAypsW3Xet_6ngBlw because this is where I send the Webinar links. The webinars are free, but access is first come first served.
Tomorrow we have a guest host from John FTSEman. He is a very experienced DaxTrader, with a strong background in market geometry, forks, ACL lines and is going to share this tomorrow. If time permits, he will discuss swap zones and why markets move as well. This on one that is not to be missed.
Dax Journal – Yesterday
Here is the Journal from yesterday. Keep up to date with what is happening during the day by becoming a premium member. You will also receive signals directly to your phone via Telegram.
This cumulative delta divergence makes almost no sense to me, unless we are about to spike higher in some sort of slingshot, before heading lower from 550
Trade context – We are struggling to take out 480 (futures) and have touched VWAP from the underside twice. We have broken below the February/Apr trend support on the daily chart and are not quite able to get back above. There is a volume pocket directly above price and it is acting as resistance for the moment. I am bearish on the SPX500 right now and one of my experimental algos has just gone short on the FTSE. So there are a number of factors pointing to a short.
Risks – the volume pocket pierces and price spikes up to test the daily high. We have been consolidating for most of the day on the VAH from yesterday (value area high). We broke/gapped higher, above the VAH this morning, suggesting a bullish breakout, so this consolidation could be strength. We have rising cumulative delta suggesting strength and a coiling of the price action ready for a burst higher.
Opportunities – A re test of the morning’s lows, allows an opportunity to short.
Potential Entry: 12515 (futures) or 12530 (fxcm)
Conclusion: wait for the reaction to the gap If 490 breaks (futures) and we test the levels I just mentioned, I want to see a decline in Delta and an increase in volume.
Although it looks like the momentum is clearly bullish, I still have this idea floating around and I am strongly considering planning it into a trade
14:53 – Trade closed
So earlier, I made a complete mess of my trade, because I close the remaining 2/3 when I only intended to close 1/3 and leave the other piece running. So I got out earlier than I expected to, by accident, not by choice.
I took another piece off
13:59 – T1 Hit
I didn’t really get the entry I wanted, because I was here typing my plan, but I got in, it’s hit the first target, so I took some profit. Now we watch.
13:42 – Trade Update
I realised that this trade is actually pretty small, it’s only risking 0.2% of my account. But I am happy with that.
13:32 – Trade Opened
DAYTRADE BUY #UK100 @ 7314.30 | SL:7300.00 | TP:7350.00 | 2017.07.11 13:31 (BST) | ID 13739767
Another opportunity is to get in at a better price on a test of that fork low.
Context – 6th July support and 30th June support and current price makes for a triple bottom. We have dropped 82 points this morning, but remain inside a trading range (at the bottom of that range). The pitch fork uses the 6/7 support as the A line, using the swing from this morning as the B and C. We can target a retracement using the levels below.
The risk is that the trade has not yet finished it’s move and can continue moving to the downside.
The opportunity is that US markets are about to open and they will see value at this price and push it higher.
If I risk 10 points, I can get 4:1 on this one. I am happy with that.
13:25 – Trade Opportunity
FTSE, is currently close to support and if this move has extended 100% then we could see a retracement towards the median line. Perhaps T1 would be the first quartile. T2 the median line
Risk is 10-15 points, reward > 40
That’s a spot to go long with 15/20 risk. My thinking is a bounce from the rising trend support, rising delta and we still have a potential to pierce the low volume pocket on the way to testing the highs from earlier.
In a slightly unusual day, I have spent the majority of the morning doing webinars. The first webinar was completed at a different location, using a different computer with none of my usual tools. It was challenging. So I came back here to hold another.
In summary: We have taken out the POC from yesterday and already extended 100% from the gap open this morning. So as for opportunities right now, we need to wait for the price to come to us. We are currently forging a double distribution day and the price has already rejected a move through that area just a few moments ago.
Our trade was closed for profit! A fantastic signal as I am sure you will agree.
Congratulations to those who took it