Market Overview: DAX 40 Futures
DAX futures went higher last month with a bull breakout. Bears failed to get a double top and turn the trend into a trading range. Bulls will buy below and scale in, expecting the breakout gap to hold. Some bears sold the 3 bear bars and are scaling-in higher. It is strong enough for a test down eventually. Always in long.
DAX 40 Futures
The Monthly DAX chart
- The DAX 40 futures went higher last month with a strong bull breakout a bull trend bar closing on its high, a bull breakout.
- The market structure is a bull channel with higher lows and higher highs.
- Bears see a double top but it looks like it failed last month and bears gave up this month.
- It is the fourth consecutive bull bar in a row, a bull spike. Traders will expect the pullback to be bought and start a spike and channel as the smaller pattern.
- After the second leg up, some traders wait for two legs sideways to down before the final push-up. The target would be the high of that inside bar.
- Three consecutive bear bars, which is strong selling, so bears who sold above got trapped and will need to scale in to get out at breakeven.
- We are at measured move target so likely some profit taking soon. Bulls will buy the breakout point and a pullback and expect to keep making new highs.
- But they will likely take profit at new highs.
- Nothing to sell, i think bears just gave up last month.
- This leg is strong enough for a second leg up.
- Breakouts of inside bars often go back to test the high. Some traders will see it as the second leg of this spike, even though it is a bull microchannel.
- Always in long, so traders should be long or flat.
- Expect sideways to up next month.
The Weekly DAX chart
- The DAX 40 futures went higher last week with another strong bull bar in a bull spike and channel.
- Market structure is a bull breakout of a trading range and a measured move up. It is also a bull spike and channel on multiple timeframes.
- Bulls will buy pullbacks and scale in below. Bears will likely fade bull scalp targets and scale in higher.
- But on this timeframe it is low probability to be short.
- It is the third consecutive bull bar, so some traders will start to take profits soon, expecting a pullback. But with a measured move target just above we might move up their early in the week.
- After the strong spike from October, most traders expected the trading range to break and get a measured move up.
- The bulls wanted to buy closer to the moving average but had to chase it up.
- Bears had two chances to reverse it and the got out of the way.
- I have measured the larger target from the bodies of the bull spike. But I might redraw it if we break it. I like to use a conservative target for my trading.
- Sometimes the market goes close to a MM target and then reverses strongly. Most bulls will look to buy a pullback, buy below bars and the breakout point, expecting it to hold.
- Nothing to sell for the bears. I said on the HTF, that I thought the bears on the monthly had to give up selling above the 3 bear bars.
- Always in long, so traders should be long or flat.
- Some bears will argue the exhaustion gap, after the gap above the ATH closed so quickly. That means when there is a pullback, sellers will be above that.
- Expect sideways to up next week to hit the targets above.
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