Dax Technical Analysis 09/02/2016

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Good morning traders!

New major lows have been reached and although we did not close below 9,000 yesterday we seem to want to continue lower.

The break below support, which was becoming a strong level, has opened up the potential support cum resistance trade and I am looking out for that.

Right now I am personally looking for selling opportunities only when the market is like this, so I won’t be going long to reach the 9200 handle. We touched support from August 8 2014 this morning and bounced from there, closing the gap which opened at 7am, as I type this article we have just reach 9043 and turned lower again.

If the current swing on the daily chart is going to extend 100% from the early 2016 swing, then targets are around 8300 and that’s definitely possible if we take out and hold below the August 2014 low because there is not a lot of support below there. The .618 extension is 8922 and the August low is 8902.

There is a lot of volatility at the moment, so short term traders are going to find conditions quite tricky as 20-30 point swings can happen within seconds and the larger leveraged positions can put a lot of strain on margin. So trade carefully.

I have a sell order at 9200 still, but I may also consider a sell order around 9050 as the 9075 level was difficult to break down yesterday.

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