Market Video Overview: DAX 40 Futures
Tim Fairweather’s weekly report on the DAX 40 futures market.
DAX 40 report AI transcript
Hi everyone. And welcome back to another Brooks trading course, weekend market update. My name is Tim Fairweather. I’m a professional price action day trader. And this week I’m going to cover the DAX 40 futures index. So let’s go and take a look.
So on the monthly chart here, you can see we had a strong bull bar and follow through above 19,000. It was a really strong close. And I said that I thought we’d come back and test 19,000 pretty quickly. And we’ve already done that in the past couple of weeks. You can see that was the breakout point and we tested. And that’s really common because you’ve got a tight trading range here. So some traders are selling and selling higher.
But at the point where we break out, those traders need to scale in to avoid a loss. And sometimes they won’t be able to, they’ll just be follow through at the same time, because that’s an outside bull bar. A lot of traders will wait for the follow through. And if you waited, well, now you’ve got a chance to try and buy back at that original price.
And that’s what a lot of traders do. So bears. Sell, sell higher and get out, wait, buy and buy lower to get in.
Looking at the weekly chart for the DAX, I’ve got the cash index here. So you can see we had a couple of really strong legs, one, pause, two, and then a couple of legs sideways. And then what happens here?
Well, it’s a little bit more difficult with this expanding. So I saw it as spike, pull back a couple of legs and then going sideways market went down to create a lower low. And now we’ve had another strong spike for bull bars above the moon. So three bull bars above the moving average strong bull micro channel buys below buys below, and then a high one by set up that high one’s triggered.
And now we’ve got a new all time high and we’ve got a breakout point bears might’ve sold. That attempted a double top. It failed. We came back and we tested. So we allowed those bears to get out here. We had a strong bull breakout and then a bear inside bar. So it’s not a great high one by above there, but we didn’t even go there.
And that’s what we said last week is, do you really want to buy above that inside bar? Or do you want to look to buy below by 19,000 test of a breakout point or somewhere in the range of this bull bar, betting that this was an okay place. to sell for bears above that bear bar, and now they’ve got a chance to get out.
Now, it’s another high one buy, because you’ve got a strong bull breakout to a new high, a pullback, and now a buy signal. So there will be buyers above that bar. Now, bears are going to argue that here’s a bull bar with a tail on it, and now their buy signal is around about the same price. So when you were buying here, your stop’s down there.
And now you’re buying here seem to have a chance with a smaller stock. Well, I think we’re always in long. We’re above both moving averages and we’re having sets of strong bull bars closing above prior highs. So I’d much prefer to be long rather than short, but will we go and test 19,000 one more time before going, or will there be enough traders looking to buy here?
I’ve got a measured move of this pullback. So we’ve got targets above. If you took a measured move from one of these lows, up. We’ve got a whole bunch of targets and this trend line. So I think we’re going higher, but you can see the pattern here. Bull bar, pause, bull bar, pause. Will we keep going with a pause bar or are we going to break out to a new high?
Can you be short here? No, I think the bears needed a bear bar closing on their low. Last week I mentioned that all the bear bars were closing you. near their lows or most of them were closing near their lows. They were very strong, very directional. That’s a whole week of nothing but strong selling. But this is a bit of a change for the bears.
And that’s a bit concerning. If I was short and I saw that bear bar, now there’s going to be buyers below, which is what we said last week. So expecting sideways to up next With high one buys on the weekly chart.
Now let’s go and take a look at the daily chart. And bears had a really good attempt with four bear bars down to 19,000.
And we said last week, well, here’s a strong bull bar. So it’s a high one buy signal, but it’s coming after four bear bars. Can you buy above it? Sure. But you’ve got to expect a pullback before it takes off. A lot of traders will buy small and buy the rest below that bull bar. They’ll be happy to buy the moving average.
And you had a chance to ignore that signal and then buy below that bull bar. Yeah. And then you had a great looking buy signal. It’s basically a second entry long. It’s a high two. The moment that took off, any bears that were expecting it to go down, I’ve had to cover and get out. And I think they’re out of the way.
So I think we’re going to run the stops of those bears. I think we’re going to go and test that high. And there’s a couple of possible measured moves, either using the signal bar for the high two, either using the wide SOP. But I think we’re going to run those stops. So it’s always in long on the daily chart.
So it’s better to be long or flat. Can you buy above Friday? Well, it’s a bull bar closing on its high. So there are going to be buyers at the close buying. One tick above, there’ll be traders trying to buy a pullback to that breakout point. They’ll even be limit order traders happy to buy lower. When the bears, they see it as high in a trading range, but you’ve really got to question what you’re going to sell in here.
You don’t have a signal to be short, so there’s no reason to be short. The next place the bears are likely to sell is above these bear bars and scale in. Now, what they’re hoping is, if you see this bear spike down, they’re hoping to sell above that spike. and make a scalp. Well, it worked once, kind of worked a second time, but what happened if you sold there and you see this?
Oh dear, two days of strong buying before you can sell again. Now, most traders are not going to be able to manage that well. And I think you don’t have to be able to manage that well, because if you’re just trading from an always in perspective and looking for buy signals in a bull channel, you’ve got at least a 60 percent hit rate.
And all of these work. Show me a buy signal in the past month that hasn’t worked. When the bars were small in here, we were at the bottom of a trading range or probably always in short. Yeah. Okay. These buy signals might not have worked, but now we’ve got a new high and a pullback. And if you bought any one of these buy signals, they’ve all worked and you never got stopped out.
And that’s a warning to anyone to being short. That is much more difficult to sell. Can this bar fail? Of course. But at the moment, odds are that if you buy on the daily chart, you’re going to at least go and test. So always in long on the daily chart and on the weekly chart and on the monthly chart. So better to be long or flat.
Traders will be looking for buy signals. On the intraday charts, traders will be looking for pullbacks, which creates the little bit of tail on the bottom of those daily bars to try and swing long.
So thanks very much for watching. It’s been a Brooks Trading Course Weekend Market Update. My name’s Tim Fairweather and I’ll see you next week.
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