Hello traders and welcome back to the DAX 30 Technical Analysis. Worries about Italy, Spain and the possible trade war between the US and China continue to cause some apprehension in the markets. However, after the political slowdown in Italy and a positive US labour market report on Friday, the German leading index continues to show some resilience. Despite this, yesterday was a slow day and actually quite boring as far as action is concerned.
According to FXCM (CFD), the DAX made +31 points progress from the open of 12748. The trading range was 131 points (40 less than the current ATR) and the majority of that activity was seen in the morning session. The afternoon session was comparatively quiet.
Price remains above the 50 and 200 daily EMA. The 50 is also above the 200, so using this alone, you would say the market is bullish. However many German analysts feel that the market is heading towards 12500. So we shall see.
As I am writing this, I can see that the Dax has held the LMLH and is now rallying past 12800.
20-Minute Chart – DAX30
The Dax is under some pressure at the moment. It has struggled to hit the ML (twice) and now the LMLH is under pressure. If it is taken out then it’s possible that the door is open for a move back down towards 12500.
But the price action is not easy to read at the moment. We are making lower lows and higher highs on this chart, so patience may be the best option.If the LMLH holds, it offers a nice spot for buyers to get long to target a break of the June high and on to 13,000.
The easiest way to stay ahead is to follow the swings. Spend some time and effort understanding how to read the price action. Studying the swing trading course, learn as much as possible about the different techniques for mapping a market. After this, it’s easy to adopt a trend following strategy.
The alternative is to use a mean reversion strategy, one which snaps back to balance after moving into price discovery. A good example of a mean reversion strategy is our BBRSI strategy. The strategy is available in the forum and the indicator is up there too.
05-06-2018 FTSE100 Analysis
The FTSE has yet to make any real progress on the way to this ML. It has tested the LMLH once before already and now it’s threatening to break it again. If we drew the quartile line on this chart (in between the LMLH and the ML), you would probably see that price has been unable to pass above the quartile line. Perhaps that’s a sign of hagopian’s rule.
Let’s see how we respond to this LMLH test first.
05-06-2018 DOW Analysis
If we look at the red arrow on this DOW chart, we can see that we are now below the LMLH. This fork is quite steep, so there is no real surprise that this has broken.
Bulls need to take out 24903 to keep this trend alive and the US markets are very good at keeping a bullish trend alive. Bears will be encouraged by a failure to do this and looking for creative shorting spots. Here’s one: Try drawing a new fork using the 24705 high, the 24340 low and the most recent high as your pivots and see how that line set looks on the chart. It’s possible that there’s a short setup
05-06-2018 Key Levels
Economic Calendar
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