Market Overview: DAX 40 Futures
DAX futures went higher last week in a bull spike and channel. Its had two clear legs up which were very steep. Bears got two legs sideways which could be the end of the second leg. It is important to see if bulls create a follow-through bar next week as well for a measured-move up of the pullback. Bears want a trading range.
DAX 40 Futures
The Weekly DAX chart
- The DAX 40 futures went higher last week in a bull spike and channel.
- It was a big bull bar closing on its high and far above the prior swing point, so next week’s follow-through is important.
- After a strong bull spike, traders expected a second leg up.
- With 3 bear bars, I thought we would see a bigger second leg sideways. But the tail below indicated that no one wanted to sell down there.
- Other bulls wanted to buy a pullback to the moving average, but they also bought higher when it wasn’t likely to happen.
- Some bears would have sold above the 3 bear bars. It is likely we will close the gap. But most traders should be looking for stop entries.
- Bulls want a follow-through bar. Some bulls want to buy into this bar because it is so big. The midpoint or a pullback to the breakout point.
- Other bulls will look at the pullback and take profits at new highs. Then wait and look to buy after 2 legs sideways. But right now, it is back to buy the close.
- Can you short here? Not without a wide stop. It is better to look for clean stop-entry trades.
- Next week is important. Swing bulls can move their stop up to April 19th low.
- Always in bulls, if they exited want to buy above a bull bar. They didn’t get triggered above the prior week. But are back in now.
- Always in long so it is better to be long or flat. Expect sideways to up next week.
The Daily DAX chart
- The DAX 40 futures went higher on Friday with a bull bar with a big tail above it.
- It closed below its midpoint, so it might signal the start of a trading range in the next few bars.
- It is a bull spike again.
- It is the seventh bull bar in a row, a bull microchannel. So, bulls will buy below the lows of the last few bars.
- Because it is a tight channel, traders expect the first reversal to be minor.
- We are at one possible measured move target, but the move up is strong, so it is early for limit order bears.
- Bears want a bear bar to sell above.
- The bulls had a strong spike and a 3-legged pullback below the moving average.
- They triggered a High 2 buy and got a breakout pullback. It was a great entry at the moving average for a move higher.
- Traders expected to test 18000, and it there were more buyers there.
- The bears had a shot at a double-top bear flag.
- But the context was not great. They had sell signals in the lower half of a trading range. That is never a good place to expect a reversal.
- It would have been better if the bulls had pushed it higher so the bears could sell in the top third.
- Using a skunk stop in the middle of that range, the bears took a loss, and we raced up to the high of the trading range and broke out.
- The bears had a strong move down to below the moving average, so I’m expecting the next pullback to dip below the high of the breakout point. We should move into more two-sided trading soon.
- But the bulls have a lot of open gaps so nothing to sell yet.
- Always in long, so better to be long or flat.
- Expect sideways to up next week.
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