29-05-2018 Dax Technical Analysis

Good morning traders, we observed the UK bank holiday yesterday and there was also very low volume around the market. Despite the think market conditions, there were a number of interesting developments in the headlines.

News Headlines

• Sergio Mattarella, president of Italy, vetoed the choice of economy minister, prompting the Prime Minister to resign.
• Giuseppe Conte had been named as the coalition’s prime minister. So, it looks like attempts at forming a coalition Five Star Movement League have failed.
• Another weekend, another Presidential mood swing. The latest reports at the tail end of Sunday are that the US/NK summit is on again. Trump tweeted that the US team has arrived in North Korea to make arrangements for Summit.
• Forza Italia says it won’t vote in favour of possible government led by Cottarelli.
• Italy president Mattarella gives mandate to Cottarelli to form a government. So Cottarelli becomes Italy’s prime minister-designate. But it won’t last for long. The political parties battling it out surely won’t vote in favour of his government, and fresh elections later this year is pretty much a guarantee at this point.
• Some cryptocurrency news from the UK – London Metropolitan police have seized digital currency for the first time ever. Grant West used ‘phishing’ email scams to obtain financial data, would then sell it on the dark web and convert his profits into bitcoin. He’s been sentenced to more than 10 years in jail

Italy are therefore dominating the headlines and it’s not looking very healthy over there at the moment. Brexit continues to drag on, as does the US/NK summit, so we have some political headwind. 

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• MAJOR SWINGS: Bearish below 13034
• We have broken the LMLH of the grey fork, without a retest from the underside
• We have zoomed the ML of the new black fork and expect a retracement back to the ML
• The LMLH of the new fork is the most likely target
• MINOR SWINGS: Bearish below 12892
• We considered the green zone balance point, but have already taken that out, so the minors are now less relevant
• The bear run continues and new swings are forming to support the bearish trend structure

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• Heavily bearish at the moment
• Gap lower this morning has not been tested yet
• There is a potential ZigZag formation around 50% of the current swing lower
• Pulling a 1/4 ACR forecasts the current zone as a potential reaction zone
• Bearish below 7764 – possible shorts on a pullback

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• The major 24625 level has fallen and the price is aggressively bearish currently
• The swings are still ugly to follow with a lot of sideways price action
• We are bearish below the major trend defining level of 24902

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