Dax Technical Analysis 27/09/2016

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Good morning traders!

A fairly significant day for the Dax yesterday, once again reminding traders of the unpredictability of this market. We started off by breaking out of the Friday evening range to the downside with a gap that did not close, this created our first daily low and once we broke that first daily low it was plain sailing for bears for pretty much the rest of the day.

05-dax-m5-chart-2

This chart here pretty much shows it all. You can see the two rising trend lines creating a channel around price, but I also pulled a fibonacci retracement from the low to the high (1 & 2). Price began its channel (3) and broke lower (4), bouncing on the 50% fibonacci line (5) before breaking through it (6) and cutting through the 61.8% and the trend support with a fast move (7), which indicates strength. There was some consolidating, but price could not hold above 10469 and eventually slumped to the next support level of 10400. A great day for bears and congratulations to all those who managed to get the points on the board.

Most of my day yesterday was dealing with migrating my signals platform and completing all the ‘paperwork’ that comes along with it, so I didn’t have much chance to get in and trade. Thanks to all of you guys for your patience with the migration.

From a shorting perspective, I am still interested in 10525, I like that level. If price does decide to turn around somewhere here, it may well press into the 10550-10575 trapping a few bears before doing so. A break below 10385 is also interesting. Be aware that the 200 day EMA is coming up, which could limit further downside temporarily.

There was some bullish divergence on the m15 chart yesterday, at support, so bulls would have been alerted to this, but instead of moving higher, we are moving sideways, along support.

Watch SPX500 (S&P500) for more clues. Watch developing EURUSD pattern on the 4 hour chart.

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