I mentioned yesterday that “this is quickly turning into another assault on 12k”, well further progress is visible today and futures is only 60 points off that major milestone right now. We’re above both previous highs (March 19th and October 17th) and completely busted out through the top of the UMLH.
The rally continues to accelerate into an area that looks less appealing for continued buying, a zone directly under 12k. It’s not to say that continued buying won’t happen, because the markets remain irrational for extended periods and greed is rife in the financial markets, but I imagine plenty of traders would welcome a contraction or a pullback with today’s Asian session range providing an obvious area to target. That’s around 860 on futures.
We have three exposed POCs below price action now. We are above the 5-day composite value area and ordinarily you’d expect to see some exhaustion up here leading to a pullback. But the Dax tends to ignore all that sometimes. And has done very often.
Pullback zones for me are the asian session range, and possibly yesterday’s high. Below that would mean an almost complete reversal intraday.
So if you want to get long, jump in. But another idea would be to consider this: if a group of traders or a large trader was to join the party now at these highs, where would their stop losses be? If you want to get long, try buying there because there is already plenty of liquidity from their stops.