Market Video Overview: DAX 40 Futures
Tim Fairweather’s weekly report on the DAX 40 futures market.
DAX 40 report transcript
Hi everyone. My name is Tim Fairweather and welcome to another DAX weekend report. So let’s go here. I’ve got a weekly chart of the DAX 40. We’ve got four bull bars in a bull micro channel. We’ve got open gaps. And the bears were able to get back to the moving average last week. I said there was a high probability that we would gap down on the open last week.
We didn’t do it in FTSE, but we did do it in DAX. We went right below the, we went below the moving average and we found buyers. Probably because Anyone that’s sold up here was sitting in profits. This is a strong bull micro channel in a bull trend. We’re above both moving averages. And that means the best sales are usually selling higher unless you’ve got a very clear wedge.
We broke a trend line. We went to test a new high for a reversal. Usually need a couple of legs up. You need to break a trend line and then a test of a new high. And that’s what the bears wanted. They wanted a major trend reversal to go down. Because it closed right above the moving average, it was a sign that a lot of those bears thought that was support.
And immediately, bears buying, bulls buying, and then we come back up. So what do you do here? If you’re a bull and you bought the close of that bar, or you bought one tick above that bar, maybe you scaled in below that bull bar, or below this bull bar, you’ve got a breakeven point right up where the limit bears were selling.
So I think the pattern that we’re doing right here is a fractal version of this pattern. I think we’re going to form a triangle in here. What’s the alternative? Well, the bulls want to see a bull follow through bar, but I don’t think they’re going to find a lot of buyers above 19, 000 at the moment. I think it’s a higher probability that we’re going to go sideways.
So I’m not looking to buy this high one. I want to see whether there’s another breakout and we’re actually going to get a new high. There’s still a two hour target. So if traders bought a swing by here, the market was going down really quickly. So I think swing traders are probably still in because the bulls got a new high.
The bears need to create a. lower high major trend reversal. So I think the bears have still got a bit more work to do. Um, I think we’re still always in long. I don’t think this was enough to put us always in short for bull bars. You’re expecting at least one more bar or a second leg up, and that’s probably what’s going to happen next week.
So I still think sideways to up for next week on the weekly chart on the DAX 40 futures on the daily chart. You can see what that breakout mode looks like. It’s very sideways. We’re going between 19, 000 and 18, 000. The spikes are very difficult to trade. We’ve got a spike down and then the second leg vanished and we created a breakout point here and we had a strong spike up and then rocketed down, creating a spike break here.
And we’re just going up to test that spike break. And that’s usually what happens in trading ranges. We break through and then come back and test. We break through, we come back and test. We break through, come back and test. We went higher, break through, come back up and test. And that’s what we’ve been doing all throughout this range.
And traders are trying to decide on direction, but what they end up doing is scalping out of their trades. Here we’ve got three bull bars above the moving average, so you’d expect some kind of second leg sideways to up, it’s more likely to be sideways. What can the bulls do here? I think the bulls need to make sure they create a layer of support above the moving average again, and this is what the weekly chart looks like.
Bulls trying to keep closing above the moving average, forcing bears to scout. And so they can buy by lowering a channel. Am I going to buy one tick above that bar? No, I don’t think it’s the right environment to do that. I think the best buyers are usually gonna be below bull bars and above bear bars.
Bears had three legs down here. One, two, and I think that’s three. On a lower timeframe. And this is what the FTSE chart actually looks like. So if you’re in a trading range and there’s three legs or potentially three legs, and that’s usually enough of the move. So on this timeframe, I still think sideways to up in trading ranges, three bars in a row is usually all you get.
So there’s an argument that some traders can sell here. I’m not going to sell above the high of that bar for me, we’re above both moving averages. So really, if we’re above the 20. Then it’s a buy or buy lower or stay flat. I think the sellers will be above bear bars. That’s not a very strong one. There might be sellers at that gap, but I think we’re still in breakout mode on both the weekly and daily chart, but I’ll give the benefit to the bulls because we’re above both moving averages on the higher timeframes.
So I don’t think we went always in short here. So it’s always in long, but it’s a channel. So traders buying, scanning in lower traders, selling and selling above. Now, at some point, someone stops are going to get run. Uh, if the bull stops got run here before. Then now we’re in a trading range and we haven’t actually broken out of that range yet.
Uh, bulls need high, high, high, low, and then they need a high, high, which they don’t have yet. There’s got a lower low here. But then a higher high. So you can see what’s happening. It’s confusing. Traders are scalping. They’re using a small position and scaling in. And I think that’s what’s going to be happening until we break out of this range.
Thanks very much for listening. My name is Tim Fairweather. See you next week.
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