Market Overview: DAX 40 Futures
DAX futures went higher last week with a strong bull breakout closing on its high and above the moving average. Back to the TTR at 18500 area. It was the first close below the MA so bulls bought it and lower. We might start to go sideways here in this tight trading range. Bulls need to get a close above the last sell signal. Bears need to close the gap below.
DAX 40 Futures
The Weekly DAX chart
- The DAX 40 futures last week was a strong bull breakout and a strong bull bar closing near its high, so we might gap up on Monday.
- The bar has nearly no overlap, meaning traders were ready to buy above as soon as the prior week ended. The bulls are strong.
- The bears had a strong breakout bar, but the follow-through was disappointing.
- If a bear sold below the bear bar, they could get out nearly break-even, and when both bulls and bears were buying, that created this trend bar.
- The bull channel had the first bear close below the moving average, which bulls were willing to buy and scale in lower, and they have made money.
- The bulls need to get above that last sell signal.
- If the last sell signal fails, they want to test the high.
- Bears made money selling 18,500 and above, and it’s a trading range, so it might be back to limit order scalping.
- Can you buy the above this week? Probably, if you can scale in. But considering the overlap in prior weeks, it will be interesting to see if we pull back first.
- Bulls should get some kind of second leg.
- The stop is far away, and the risk-reward is difficult here. You’re betting on a new ATH, but in the middle of a trading range, the context is probably closer to 50%.
- The only bull close that hasn’t been tested is just above, so we might start to go sideways soon.
- Are we always in long? The bulls need one more bar in the trading range, but you don’t usually get it.
- So, if they do get it, it should be a pullback and then a second leg up, but I think the bar is more likely testing the bad sell from before.
- Expect sideways to up next week, so traders should be long or flat.
The Daily DAX chart
- The DAX 40 futures on Friday was a bull bar with a small tail above.
- It’s in a 9-bar bull microchannel, which is unusual and, therefore, climactic, so we should pull back soon.
- It’s BTC, buy the close, but I think most traders should wait for a 30% pullback or a couple of sideways legs.
- Because Friday was a small bar compared to the rest of the week, Monday could be a big bar—volatility expansion following volatility contraction.
- The bears saw a strong spike below the 200 daily and then a strong reversal.
- The bears were unwilling to sell below the bar. That means they are more likely to be selling above prior highs and scaling-in higher.
- The sell climax target is the high of the last sell climax.
- There’s one open gap still, left by the bull bar before the bear spike, so we should go up and close near the 18,600 area on Monday before starting to go sideways.
- Consecutive closes above the MA and one of them being big, indicates always-in long, so there should be a pullback soon for a second leg up.
- If it’s always in long, traders should be long or flat.
- Expect sideways to up next week.
- There is nothing to sell.
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