Yesterday, driven by the EU’s agreement on the largest budget and financial package in its history, the German DAX climbed to 13,311 points and returned to the highest levels we’ve seen since the end of February this year. When you consider how much money is printing at the moment, you have to ask the question will DAX reach another all-time high? The all-time high is around 13,818 so we are talking another 500 points higher. So long as the trend defining levels stay intact, then yes, it’s a strong possibility. Consider that the market was trading below 8000 in March and has added over 5000 points since then, so we’re talking about squeezing out another 10% of that rally. Ordinarily, that would be a big ask, but pumping trillions into a financial system will inevitably inflate the financial markets and then eventually increase retail inflation. So I would be surprised if we do NOT reach an all-time high. It may not happen quickly, but I think it will happen. Don’t take this as financial advice, because it isn’t. Trade at your own responsibility. Covid-19, trade wars and other geopolitical issues remain the largest risk to this idea.
22-07-2020 DAX 30 Analysis
Good morning traders, it’s Wednesday the 22nd of July and time for today’s 22-7-2020 German DAX 30 analysis.
DAX 30 Review From Last Session
During the last session, we saw the DAX 30 find a session high of 13311 and a session low of 13070 giving us a range of 241 points compared to the average daily range of 228. At the close of play last session, the market closed at 13092 which was 1124 points above the 200EMA and 859 points above the 50EMA.
What Is The DAX Doing Today?
The DAX is currently Bullish.
The German DAX 30 index is currently showing a progressive series of higher highs and higher lows. The trend defining level is currently 12799, so the market remains bullish above that level. In order for the market to remain bullish, we need to take out 13311. I will again be looking to use the DAX trading strategy to provide some useful setups today.. It’s worth mentioning that the daily DAX RSI reading is currently 71, which is pretty overbought. Although we know that momentum is clearly bullish right now, the buying pressure now has a much higher likelihood of running out of steam. We can still get long, but perhaps we should be cautious entering longs. We have a classical situation on the daily chart whereby the 5EMA is above the 8EMA, the 8EMA is also above the 50EMA and finally the 50EMA is above the 200EMA. That’s a very bullish market, the first sign of a turn could be when the 5EMA breaks below the 8EMA.
DAX 30 Key Levels
Moving on to the key levels to watch today, watch out for the previous session Point of Control (POC) at 13232 and the previous session Volume Weighted Average Price (VWAP) at 13205. The value area high (VAH) is currently 13300 and the value area low (VAL) is currently 13167.
|Stochastic||K: 84 and D: 85|
|Point of Control (POC)||13232|
|Value Area High (VAH)||13300|
|Value Area Low (VAL)||13167|
|The DAX Pivot||13158|
|The DAX R2||13399|
|The DAX S2||12916|
|Daily 5 EMA||13042|
|Daily 8 EMA||12956|
|Daily 50 EMA||12233|
|Daily 200 EMA||11968|
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As for my index trading; during the last trading session I took a total of 3 trades (2 DAX trades and 1 FTSE trade). Breaking down my DAX trades, 1 was from the DAX trading strategy (DTI) and 1 was from the regular morning DAX signal. Breaking down my FTSE trade, 0 were from the FTSE trading strategy (Using the DAX DTI) and 1 was from the regular morning FTSE signal. Overall, I hit 0 winners, 3 losers, and 0 break-even trades. This gave me a total profit of -3% for the day.
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