Market Video Overview: DAX 40 Futures
Tim Fairweather’s weekly report on the DAX 40 futures market.
DAX 40 report transcript
Hi everyone. Welcome back to another weekend market update. My name’s Tim Fairweather and today we’re going to start with the DAX 40 futures. So let’s go and take a look. So just before we get onto the weekly chart, let’s just take a look at the monthly chart. So on the monthly, we’re in a bull channel.
Okay. We went above a big bull bar that was an outside bar, we got a strong bull close, we haven’t yet triggered the buy above that bar and we closed the breakout point on that buy. So some traders bought above that bar, other traders waited for the breakout and bought the test. So that’s where we are on the monthly.
On the DAX weekly chart, now someone asked why am I using the cash index for the German 30? It’s a little bit easier without all the gaps to read the price action. But as you get more experienced, obviously you can look at both. I think it’s easier to talk about, uh, talk about it with no gaps. So on the weekly chart you can see we hit the two R target that I had drawn up on the chart for the last few weeks.
So it was this swing by here. Uh, it’s had a couple of strong bear bars, so I thought a two R target on this trade was reasonable. Then we broke above a swing point. We had a high or low, and I said that when you get four bull bars in a row like this, very consistent open gaps. You know, no real overlap, even though these were places for bears to sell.
It’s not the kind of sell that I think most traders should be looking for. I think better to stay flat, wait for a really strong leg and then participate in the next move. And we said that this bull bar would be a buy signal. And then the traders would wait for confirmation, which they did. They got consecutive bull bars and you can see how we took off in the prior week when you hire.
And then last week we said, well, we’ve hit that to our target. What’s going to happen next? Well, some of those traders will get out and sell other bears. We’ll sell up there betting. We will test this breakout point here. Reasonable looking sell signal. I mean, not a great stop entry because it’s closing at the moving average, but 19,000 big round number.
So try to sell 19,000 probably sell, you know, three, four, 500 points higher, and then the test still not recommended for beginners because what happens if you get another bull bar like this, uh, difficult to manage. So last week was a bear inside bar with a tail on it. So two sided trading. Uh, is it a good sell below there?
No, I don’t think so. I think three ball bars up means, uh, this is going to have a second leg. We had four bars up pause, three bars up pause. So I really want to be either long or flat. We’re always in long, we’re above both moving averages, and we’ve got a new high. Now we spent a lot of time between 18,000 and 19,000.
Seattle market had a little bit of trouble getting over 19,000. So I would be surprised if this just took off. I think we’re going to spend a little bit more time here as everyone in this range decides this is the new part of the range. Uh, what did a bear see? Well, we’re in an expanding triangle and bears are getting sets of three bars, five bars, two really strong bear bars.
All the bear bars here are really closing on their low. And so that’s a little bit of a problem for buying very high in a bull trend. We’re in a channel so traders know they can sell and sell higher. And if you look back, if a bear sold above that high, they made money. Never got there, never got there.
They sold above that high. They make money. They sold that high and scaled in higher. They made money. What the bulls really need is a strong gap to trap those bears. They’ve got a body gap, but that’s probably not going to be enough. Is the signal bar for short? No. Will traders buy below that? I think so, but I don’t think there’s any rush to buy here.
You might get a chance a little bit lower. Probably the daily chart is going to give you a better signal bar because we just had really good stop entry signal bars on the weekly there. So I think sideways to up on the weekly charts. for next week. So the DAX 40 on the daily chart. Well, let’s have a look at last week.
Four bear bars in a row and then a bull signal bar. It’s a bull outside bar. It’s at a great location, breakout point above the moving average above 19,000. So the bulls have that strong breakout. And we said in prior reports, all the breakout points are getting overlapped. So is that a buy signal for Monday?
Well, you’ve got a couple of choices. I think if you buy there, you need to expect this to have a second piece. So there’s a chance you buy there, you’re gonna have to buy lower. You buy there, is this for a new all time high? But it’s probably for a scalp to the low of that inside bar there. And that means the risk reward’s not great.
You’re probably looking at a half R. Can that take off and get a new high? Absolutely. Uh, it’s not a great sell in here yet. I think the sell’s probably higher. Yeah. And I don’t really want to sell now that we’ve got strong bull bars with follow through above the all time high and above 19,000. So I think traders that were long scaled in, so I think they’ll make money.
The highest high one here was this bull bar. So I think we’ll probably go up and test that maybe Tuesday. I think this will definitely get a second leg. You can see when you have strong sets of bull bars and your two big bars, second leg. One, two, three, four, five bear bars down second and third legs. Here you had a strong bear leg and then you had that leg was split into two here.
So the bulls really want the bear leg up here, but I think now because that whole breakout point got closed so quickly, I would be hesitant to buy above that bar, even though the mass might say it’s okay. I prefer to wait for another bull bar and look to buy lower. So it’s always in long, we’re above 19,000, but seeing four strong bear bars here is a sign that gaps are closing instantly.
And that means we’re either in the top part of a channel or a trading range, and we’re just not clear on where the bottom is. So it’s still more of a buy than a sell, but I think the buyers for traders that are already scale in. Other traders will be waiting for a follow through bar there. What happens if Monday is a strong bull signal bar like this?
Well, I’m not sure that’s very good for the bulls either, because now you’ve got two bars up, completely retraced on four bars. If you now get two bars back to the high, now we’re back in a tight trading range, which was the problem in here. Strong bars down, strong bars up, strong bars down, market goes sideways.
They really want to create these consistent small bull bars Which will lead to further legs. So still always in long on all the time frames and around 19,000. Got a new all time high. So sideways to up expected for next week.
Thanks very much for watching. My name is Tim Fairweather and we’ll see you next weekend. Cheers.
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