19-11-2018 Dax Technical Analysis

19-11-2018 Dax

Good morning traders. I hope you all enjoyed your weekend. It was a great week here last week, despite the politics and Brexit chaos causing some unusual price action. Let’s take a quick look through some of the headlines.

Headlines

Theresa May says there is no alternative plan for Brexit and states that getting rid of her will not make the process easier. A US-led coalition airstrikes in Syria kill 43 people. Macron is struggling at the moment with one person dead and dozens wounded in French fuel protests. Trump hints at government shutdown over border wall funding. Germany to open its market to Uber by 2021 says their transport minister. Pence warns China tariffs could ‘more than double’. Over 1,000 missing, 71 dead in California fires. Bitcoin Cash falls following hard fork.

Technical Analysis

Last week the DAX dropped 1.7% closing at 11372 (CFD). 

On the daily chart, we can see a number of large tail candles over the last few days. These large tail candles suggest that the market is rejecting lower prices. So I decided to build a study to look at previous situations where we had these types of candle. The logic for this study is simple enough, there are three things to ask for (on the daily chart)

  1. Is the tail over 100 points?
  2. Is the candle body less than 50 points?
  3. Is the top of the candle (wick) less than 50 points

Here is the code (you can copy and paste this into the “Color Bar Based On Alert Condition” study in Sierra Charts:

=and(
(c-l)>100,
(((o-c)^2)^0.5)<50,
(h-c)<50,
)

Right now, those settings don’t provide much of a conclusion, so I am going to amend the settings and attempt to filter the candles to look more similar to the ones we have seen over the last couple of trading days. Perhaps I will look for the candle body to be less than 45 points and the tail to be over 125 points. It’s probably best to measure the previous candles and take our filter levels from that.

Anyway, we digress. The blue diamonds show the previous examples:

Hourly Chart

As for the hourly chart, we can see that last week we attempted to break out of that trading range (highlighted with the rectangular boxes). We failed to ‘close’ below the range, but we certainly pierced to new lows. I will be watching that closely again this week. 

I’m interested to see if the recent high (11450) holds.

If it does hold, and we continue to break to new lows, then traders will be focusing on a move towards 11k. 

19-11-2018 Key Levels

  DAX FTSE DOW ESTOXX
Point of Control :  11367 7033 25293 3188
Value Area High :  11408 7043 25432 3194
Value Area Low :  11307 6989 25233 3167
VWAP :  11352 7025 25310 3187
R2 :  11564 7161 25768 3246
S2 :  11135 6911 24950 3130
Pivot :  11349 7036 25359 3188
Camarilla Breakout (Bull) 11490 7116 25680 3223
Camarilla Breakout (Bear) 11254 6978 25231 3159

Signals

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Here is the page for keeping up to date with the signals results (not including the broadcast scalp trades): https://thedaxtrader.co.uk/daxtrader-signals-results/

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