DAX final summary

Dax Market Summary 07/11/2014

Prediction correct today. We experienced a pull-back, perhaps the start of a correction, but more likely just a pull-back.

NFP missed it’s expected print and tensions rise in Ukraine as convey of tanks enter from Russia. The top 6 companies from the Dax (by market capitalisation) experienced down days) and we pretty much traded under the vwap all day taking out most of the bearish intra-day levels.

My trade order of 9250 was filled and I am now long the Dax.

The outlook for the Dax is still good, with lower oil prices, the end of year ‘santa-rally’ coming and us still in the middle of the reporting season, we can expect there to be a continuation of the trend, but I would think a correction is due at some point.

DAX midday update

Geo-political risk pulls market lower in this mornings trading with Ukraine government reporting that a column of 32 tanks has entered the country from Russia.

There is also divergence between the Eurostox and the Dax suggesting that one of them will need to catch up to the other one putting further downside pressure on the Dax.

The market is currently overbought in the short-term so I would personally welcome a small correction before a resumption of the uptrend, as I mentioned earlier.

Naked vpoc is 9288 and if we get there, we could extend lower towards yesterdays value area low of 9274 from there we target the deviation low, but it’s unlikely we drop as far as that before 13:30GMT when NFP is released. I am long from 9250.

Good luck trading

Dax Morning Headlines So Far

Dax Technical Analysis and Commentary

Big bull day yesterday, lots of news, lots of volatility and volume and generally after a big day we have tended to see a pull-back or at least a period of consolidation before the resumption of the overall trend. We have now seen two decent bull days in a row, and based on the trend over the last few weeks, I think we can expect to see a couple of slower days, Friday also tends to be a day for reversals. That would normally be my expectation/prediction, but today happens to be NFP day and anything can happen on NFP day. It’s kind of a make or break moment for the latest US monetary policy decision, if they print a massive figure (which I predict they will) then all is good, markets rally again and wake up on Monday with a hangover. If they print bad or on target then I go with my first prediction about a correction.

If the figure is horrendous (which I doubt) then there is a problem.

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Daily Dax Technicals

Worrying steepness of trend

I have spotted a slightly worrying sign that the steepness of the current bull trend is unsustainable, we have covered over 1000 points in just over three weeks and that is pretty unheard of without a correction. So you could argue that when price was heavily rejected from the 8300 level on the 16th, with an astronomical high volume day, we are still just feeling the follow-through now as new investors flood the market as the public participation phase sets in, cue the bubble theory.

So I would personally like to see a healthy correction for a couple of days fairly soon, to at least break the trend up a little. Take it off the boil for a moment because no-one likes it burnt out. It will continue upwards, but build again from a better lower level.

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Hourly Dax Technicals

Hourly chart uptrend

Here no-one can deny we are showing the basics of an up trend, higher highs and higher lows.

Based on what I said earlier, I would like to see a correction down closer towards the most recent low; 9150-9170 zone before I enter another long position. I will spend the day watching tomorrow to see how the market reacts, but I would imagin I would enter around the 9250 area targeting 9500.

Some interesting news to come up tomorrow, I have no open positions on the Dax and after an excellent week I am reluctant to chase something and would prefer the market comes to me.

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Key Levels to watch

Good luck trading

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