Good morning traders!
We had a triangle break yesterday, which caught a few bullish traders out and put them in a bad spot. We initially broke the range to the upside threatening a break on a move above 10,000, but rather than rallying, we crash through the bottom of the range and shed over 300 points. The sell off is not surprising when you look at the daily chart and see that the 10059 level was major resistance in the form of the 50% fib level from the December/Feb swing.
Looking at the swing of yesterday, we retraced around 50% of the move now and so I would imagine may traders are gearing up to short from current position and look for the next wave down. We have reached the 50% fib zone, we have touched the underside of the March 15 support, so I think it’s definitely possible. But the Dax does like to trap traders, so just watch out for a deeper pullback towards 9950/10000.
We the Dax makes these Zig Zig moves, the tend to digest and settle for a short period and then continue the most recent momentum. So in this case we could trade sideways a little, mayne falling as low as 9800-9832 and then just continue rising higher catching the bears in a trap.
The daily chart is bearish and currently at major resistance (the 200 EMA is there too)
The H4 chart still shows a bullish trend in the short term, but is shaping to providing a bearish setup.
The m30 chart shows slowing MACD momentum
The m5 chart shows us reaching a pullback of 50% from the swing yesterday
My bias is bearish, but cautious of a bear trap.
Dax Support & Resistance
| KEY LEVELS | |
| Daily R2 | 10220 |
| Daily R1 | 10051 |
| Daily Pivot | 9900 |
| Daily S1 | 9731 |
| Daily S2 | 9579 |
| 200 Day EMA | 10233 |
