Market Video Overview: DAX 40 Futures
Tim Fairweather’s weekly report on the DAX 40 futures market.
DAX 40 report transcript
Hi everyone. And welcome back to another weekend market report. My name is Tim Fairweather, and we’re going to talk about the DAX. So let’s check it out.
Looking at the monthly DAX here. We’ve got, we’re looking at DAX on the monthly chart. We’ve got a bull outside bar here, small body, big tail below, and we’ve got one more trading day left.
And so far we’ve got a big bull bar closing near a tie. We’re closing above 19,000 and this has been a magnet for quite a while. So it’s been an important close that the bulls needed to keep this bull channel going. The bulls see an attempt at a double top. A breakout and this leg was incredibly strong and traders are starting to wonder, is this leg going to have two other legs like it for a wedge top up here to 20,000 and beyond, or was this one leg pause two, two legs sideways.
And is this the third leg? It’s a little bit confusing. So this looks like a final flag to me, but we might be getting a breakout of that final flag. So leg three and then pull back to 19,000. I think if you look back to the big round numbers, we’ve got 18,000 in here. We’ve got 17,000 down here. It would be unlikely for this just to take off.
And never look back. We’ve got a couple of measured move targets above as well. One of the problems that the bears have here is that they haven’t triggered any bear bars on the monthly chart. And for me that means a bear bar where you could sell on a stop one tick below and you got taken in on the next bar.
So here bears can sell the bar. Here bears can sell below. Here not. And you can see once bear bars start to trigger, We start to get sideways to down, but he nothing yet. So we’re still always in long. So expecting sideways to up. So best choice. Long or flat, but we’ve had a very tight trading range in here.
So I think we’re going to come back and test this. We might even spend a bit of time. Once we reach the targets above, what are the bears want? Well, the bears want a really big tail on this bar, but with one trading day left, probably not likely they’re going to get that. So that means you’ve got a bull breakout and follow through.
Another way to look at it is that This outside bar did not close strongly above the prior bull bars. So this signal here is not that clear. If it took off, we’ll probably come back and test it. The other issue for the bulls is to buy up here, your stop is very far away. And because that was an outside bar, that’s essentially a lower low.
It’s part of an expanding triangle. And we’ll see that more clearly on the weekly chart. So now we’re looking at the weekly chart and you can see that expanding triangle. We’re coming up. We’ve got three legs up, two legs sideways. And the bears were able to get price below a swing low. So essentially if that was your swing stop somewhere in here or here, that got broken.
So traders were looking for this to turn into a trading range, but then the bulls got 1, bars in a row, a pullback with a buy under. And we said that buying in here, buying the moving average, buying above this bar, we’re all going to be reasonably good trades expecting to run the stops. Two weeks ago. It was a small bull doji.
It was reasonable to sell above these bear bars, and it was reasonable to sell above that bear bar, but those bears are now trapped. So I think we’re probably going to come back. To let them out and then traders will decide if this is a breakout pullback for another leg up, or we’ll start doing more of this.
I’ve got a trend line in case that is the channel that we’re going up to. It was a two hour target on this buy, which we reached last week. And we’re about one times this weekly bar here. So for traders sold below that bear bar, sold more above the high. Sold more one times that bar up. That’s probably where we’re going to pause next week around about 19.
So what do the bears need? Well, the bears need another sell signal here and it needs to be good enough to convince traders not to buy above the high of these bars. What about for the bulls? Well, they’ve got four bull bars in a row, three bull bars in a row. So more likely we’re in a bull channel.
They’ll buy and scale in lower below these bull bars back at the moving average. But they don’t want to come back into this mid range too much because you can see there were a lot of bears there. Is last week a good signal bar? Well, it’s a strong bull bar above the moving average. The stop is far away.
It’s a better buy than a sell, but you’re in an expanding trading range with a lot of overlapping bars. So we’ll see next week. Is this a profit taking bar and traders will sell the clothes or is it a strong enough breakout? Now we’ve got two strong closes. above the prior high, the trader is going to buy above it.
Well, thanks very much for watching. So that was the DAX 40 futures for next week, the monthly and the weekly chart. And I’ll see you again next week. Happy trading.
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