31-01-2019 DAX

31-01-2019 DAX Technical Analysis

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Morning traders and welcome to the 31-01-2019 DAX Technical Analysis. Yesterday we had some strong earnings per share numbers from the big US companies: Boeing delivered 5.48 vs 4.57. Facebook 2.38 vs 2.18. McDonalds 1.97 vs 1.89. Microsoft 1.10 vs 1.09. PayPal 0.69 vs 0.67 with many others mostly hitting expectations. Boeing was the main release which sent the DOW Jones into the sky. In other news, the ADP numbers came in hotter than expected 213k vs 180k so that will provide a clue for NFP tomorrow and the Fed decided to keep rates unchanged at 2.50%.

31-01-2019 Outlook

As for today, we have the German Unemployment Change numbers, Canadian GDP from November and the US New Home Sales numbers from November. Check the economic calendar for more information there. 

Regarding the earnings releases, we have Amazon and Mastercard out today along with many other companies.

31-01-2019 Dax Analysis

For the last four days the DAX has been carving out a range between 11131 and 11325, with three consecutive, balanced, doji/spinning top candles. The candle type is only important to me because it demonstrates that price has found some value here. So once we break out of this zone, which we will, it’s likely that price will want to return to this zone. Here is the daily chart showing the zone to which I am referring.

The black swing markers on the chart below show the continued bullish ‘relief rally’ from the major low of December. I should correct myself, because this is not really a relief rally, this is a major ‘reaction wave’. Within that reaction wave we can see the series of higher highs and higher lows and for me, these are the minor swings. 

The DAX remains bullish above 11,005.

I was expecting for price to test that 11067-11091 zone yesterday, after piercing the 11159 low, but the market rejected lower prices. Now we are trading in what could be described as a large Bull Flag, or channel and threatening to break through the top as I write the article.

Yesterday I sent out an earlier version of this chart with a message describing the downsloping ACR line set (the trio of lines). I was expecting for price to go and reach the upper ‘reaction’ line, which at the time was at the point of control. We can see now that price achieved both goals. It tagged the reaction line, and then broke the ACR line set, kissed it goodbye and continued up to the point of control. In the video above I also describe how this line set can be turned into a pitch fork. When we use that pitchfork, we can see how the price reachied the median line and another set of fork lines could be drawn.

The profile from Tuesday was very much normally distributed,  perhaps this explains why price returned back there. And today is much the same with another normally distributed profile.

DAX Daily

MACD 91.98 BUY
RSI 71.11 BUY
Stochastic 94.06 BUY
ADX 18.93 NEUTRAL
CCI 97.05 NEUTRAL
Aroon 64.28 BUY
Alligator 10843.06 BUY
Awesome Oscillator 354.19 BUY
Parabolic 11131.5 BUY
SuperTrend 10999.29 BUY
     
OVERALL   BUY

DAX Hourly

MACD 5.16 BUY
RSI 62.98 BUY
Stochastic 96.6 BUY
ADX 18.63 NEUTRAL
CCI 236.27 BUY
Aroon 50 BUY
Alligator 11201.89 NEUTRAL
Awesome Oscillator 9.64 NEUTRAL
Parabolic 11143.71 BUY
SuperTrend 11148.34 BUY
     
OVERALL   BUY

31-01-2019 Key Levels

  DAX
Point of Control :  11190
Value Area High :  11207
Value Area Low :  11168
VWAP :  11187
R2 :  11296
S2 :  11088
Pivot :  11192
Camarilla Breakout (Bull) 11267
Camarilla Breakout (Bear) 11153

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