DAX Breaks Below 13,000 but monetary conditions remain soft. Until this morning we were following a bullish trend until price broke below the trend-defining level of 13,009 and currently trading around 12,950. Perhaps the market is looking for value at lower levels, targeting the ignition point of Monday’s rally. Either way, just remember how much money is being printed, so temporarily, the markets will probably remain strong.
We get economic confidence for the Eurozone today which is expected to rise slightly for August [compared to July]. The global economy is strengthening because of all the printed money and government subsidies. Given that monetary conditions are staying very soft and we have QE programmes everywhere, we expect that there is a limit to how much interest rates can rise. Both the Fed and the ECB want a continuation of monetary conditions. The Fed will now make up for inflation running below the 2% target by allowing inflation to move above 2% for some time such that inflation on average is 2% over the business cycle. Sounds like a recipe for potential disaster because the ‘calculation’ for the average is probably going to flexible enough to cover up any issues. Watch for US private consumption data for July today because it may be the case that consumers are substituting away from services and into goods.
28-08-2020 DAX 30 Analysis
Good morning traders, it’s Friday the 28th of August and time for today’s 28-8-2020 German DAX 30 analysis.
DAX 30 Review From Last Session
During the last session, we saw the DAX 30 get to a session high of 13236 and a session low of 13021 giving us a range of 215 points compared to the average daily range of 227. At the close of play last session, the market closed at 13068 which was 891 points above the 200EMA and 407 points above the 50EMA.
DAX 30 Index Outlook
The DAX is currently Bearish in the short term. We’d need to take out 13,220 to resume any bullish momentum. This is less likely on a Friday.
DAX Levels To Watch
As for the key levels to watch today, watch out for the previous session Point of Control (POC) at 13163 and the previous session Volume Weighted Average Price (VWAP) at 13137. The value area high (VAH) is currently 13206 and the value area low (VAL) is currently 13106.
|Stochastic||K: 66 and D: 78|
|Point of Control (POC)||13163|
|Value Area High (VAH)||13206|
|Value Area Low (VAL)||13106|
|The DAX Pivot||13108|
|The DAX R2||13323|
|The DAX S2||12894|
|Daily 5 EMA||13059|
|Daily 8 EMA||13027|
|Daily 50 EMA||12661|
|Daily 200 EMA||12177|
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As for my index trading; during the last trading session I took a total of 8 trades, so it was an interesting session with plenty of trading opportunities (4 DAX trades and 4 FTSE trades). Breaking down my DAX trades, 3 were from the DAX trading strategy (DTI) and 1 was from the regular morning DAX signal. Breaking down my FTSE trades, 2 were from the FTSE trading strategy (Using the DAX DTI) and 2 were from the regular morning FTSE signal. Overall, I hit 0 winners, 4 losers, and 3 break-even trades. This gave me a total profit of -2% for the day (including a trade I closed around 8pm). Losing is part of trading, there is nothing you can do. We all prefer to make gains, of course. Remember to take the emotion out of trading, otherwise you run the risk of becoming a gambler.
My final DTI trade (that’s one my main DAX Trading Strategies that I share with members) on the DAX saved my day. It was very close to hitting target, but that trade finished up around +2%, so I can be thankful for that one. But today is a new opportunity.
|DAX DTI||DAX DAILY||FTSE DTI||FTSE DAILY|
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DAX BREAKS BELOW 13,000 BUT MONETARY CONDITIONS REMAIN SOFT