Donald Trump gets what he wants, again, which is lower interest rates. And to be honest, the market doesn’t even care. It doesn’t even care, the markets continue to dump! These are very challenging times as an investor and very volatile times as a trader.
The financial market capitulation that I mentioned before, still continues and the most worrying or encouraging announcement (depending on which side of the fence you are) is that we have another $700 billion of QE which translates to full-blown money printing and massive further extension of national debt PLUS relaxing the requirements on banking reserves?!
If we take a step back from all that, you can see that Coronavirus and COVID-19 get the majority of the blame here (according to the central banks). Well, in my opinion, that’s just a nice scapegoat and a distraction.
So where is this QE money going to go? Is it going to bail out local businesses and communities that will suffer during this virus? Is it going to help the poorest families that may not be able to feed themselves? Is it going into hospital care, virus prevention and drug manufacture? Or, is it going to pre-emptively prop up failing banks to avoid a more serious global economic problem? I’m leaning towards the latter. So keep an eye on the money flow.
DAX 30 Review From Last Session
A lot of people are saying “surely if the market is moving 1000 points a day, it’s the perfect time to trade, right? No! You could not be further from the truth for most people. If you like to gamble, then sure, it’s perfect for you. If you don’t mind trading with no stop loss, then sure, it’s perfect for you. If you are comfortable trading with an enormous stop loss, then sure, it’s perfect for you. But for the majority of experienced and disciplined traders that have a proper trading plan, these situations do not always translate to ideal trading conditions because it’s difficult to make sense of the market when volatility explodes.
If I can not make sense of the market, I won’t trade it. It’s as simple as that.
During the last session, we saw the DAX 30 touch a session high of 9998 and a session low of 8824 giving us a range of 1174 points. When you compare that to the average daily range of 626, which is nuts, you can see we were 548 points above the average! Crazy!
DAX 30 Index Key Levels
Moving over to the key levels to watch today, watch out for the previous session Point of Control (POC) at 9468. Today’s initial balance is between 8410 and 8805, so watch for a momentum break of either of those two levels. The value area high is currently 9616 and the value area low is currently 9116. Here are some more levels to watch out for:
- The 5 EMA (Daily): 9561
- The 8 EMA (Daily): 10070
- The 50 EMA (Daily): 12287
- The 200 EMA (Daily): 12537
DAX Technical Indicators
|Stochastic||K: 4 and D: 9|
|Point of Control (POC)||9468|
|Value Area High (VAH)||9616|
|Value Area Low (VAL)||9116|
|The DAX Pivot||9474|
|The DAX R2||10649|
|The DAX S2||8300|
The DAX trading strategy can still be used to find good quality trading signals. Remember, you can get a copy of the DAX trading strategy for yourself. All you need to do is get Sierra Chart installed on your machine. If you need a reminder of how to do that, visit the dax trading strategy page.
To keep up with the economic calendar and the latest price action, click this link to open up the DAX chart.