Dax Technical Analysis 12/10/2016

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Good morning traders!

The major talking point yesterday was the slump in the SPX, with the healthcare sector hit the hardest, perhaps due to the likelihood of a Clinton presidency increasing. I did a mini-poll on Twitter and the results also gave the same opinion. It’s also possible that the rate hike expectations have played a part in the US indices slump. Analysts were also pointing towards Yom Kippur which caused thin trading conditions yesterday. WTI and Brent (futures) came to yearly highs

On the Dax, we began fairly bullish after we had a strong Zew yesterday, printing 6.2 vs 4.3 expected (economic sentiment of Germany for the next six months given by a panel of economists and analysts), but the afternoon session was pulled lower by US and provided some excellent trading opportunities.

On the daily chart, we created a daily high of 10693 which encouraged bears because this was lower than the recent high from September and it respected the trend line resistance as we closed lower on the day at 10571. This failure to create a new high and rejection at resistance increases the likelihood of further downside.

On the H4 chart, there is still nothing to note.

On the H1 chart yesterday we had a great trading opportunity. I sent this out to my premium subscribers and it did very well. The signal was: DAYTRADE SELL #GER30 @ 10656.90 | SL:10700.00 | TP:10555.00 | 2016.10.11 14:38 (BST) | ID 58080154

The signal came from the H1 chart as we approached the 10700 resistance, we made a long-wick (almost pin-bar) candle and began creating lower lows. When you saw what began to happen on the US indices, it became a really strong signal to sell.

On the 5 minute chart, we settled pretty much right on the daily pivot. Today we are currently below the new daily pivot and we have retraced 61.8% of this week’s swing, so a break below 10540 could be interesting as it opens up the door to test the 10465 level again. If we hold 10540, then it could start to create another inverse head and shoulders pattern.