15/05/2018 Dax Technical Analysis

15-05-2018 Dax

The Dax has completed its major Bullish Impulse leg higher and is currently in a major Bearish Reaction leg lower. Let’s look at a few charts.

If we start by looking at the TPO chart under this text, we can see three red arrows pointing at POCs (Point of Controls). The first of those POCs was reached yesterday the middle one is around 12917 and the lower one is around 12877. If we do take out the lower of the three POCs, then this may coincide with a break of the major trend-defining level.

At the moment, this bearish activity can be considered as a normal bearish reaction leg, or pull back as it’s more commonly known.

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15-05-2018 Dax 20-Minute Chart

Let’s take a look at the 20-minute chart. I have three tools here. First up, you can see a bullish dark grey ACR line set. Notice how the price action has broken below the centreline and is now about to reach the lower reaction line. These line sets can be very good forecasting tools.

You can also see two light grey forks. The larger of the two forks were pulled from three recent major pivots. The fork is bearish and forecasts where the bearish reaction leg will likely reach. The price reached that zone twice yesterday and also again this morning after the gap lower. This fork does not guarantee a reversal at this level, so now we can watch what price action does here.

The smaller light grey fork was pulled from three minor pivots. It’s also a bearish fork, with a much steeper angle to the downside. When you observe price action breaking out the top of this for yesterday, we may need to consider the validity of this fork. We could perhaps use a sliding parallel line and measure how far away price has moved from the fork. Or perhaps we could even move/shift/duplicate the fork, or use a Schiff. We have options.

Most importantly, this chart shows the major swings. The lowest black swing marker that we can see is for the low of May 8 Which is around 12850. That is the major trend-defining level at the moment. Therefore we have recently witnessed a major bullish impulse leg up, and the most natural thing to witness next is a bearish reaction leg down. We believe that is what we are currently seeing.

15-05-2018 Dax Key Levels

2018-05-15_0814

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