Market Overview: DAX 40 Futures
DAX futures went lower last week with a failed bull breakout, pulling back to the MA after three legs up. It was a double top, and we will likely form a trading range up here between 18000 and 19000. The bulls want a double bottom test of the high and to hit 19000. Bears want a measured move down. Most likely will be sideways.
DAX 40 Futures
The Weekly DAX chart
- The DAX 40 futures went lower last week, with a strong bear bar closing on its low in a failed bull breakout.
- We just missed 19000 and expected the price to come back and test 18000, and we did it fast! It will likely be a magnet for a while.
- It is the fifth consecutive bear bar a second leg down in a pullback from the ATH.
- The bulls had three clear legs up. You can see the two-legged pullbacks between the second and third legs.
- It failed to break out above the prior high, so it is an HH DT. Some traders will see the neckline as the third bear bar, but more importantly, the low of this bull bar.
- If the bears can get below the strong bull trend bar, it becomes a buy climax, and they will make a measured move down.
- The measured move will return to the November 2023 breakout point if they can pass the second leg.
- The bulls got two equal legs up, with many strong bull bars, but the three bear bars in a row were a sign that profit-taking was due to begin.
- On a test of the high, any bulls that had not exited closed at the highs.
- It is a big bear, so there is a lower probability of selling here and at the moving average. Bears will look to see the follow-through of this bar, but still more likely sideways to down rather than straight down.
- Always in short by context, but low in a higher trading range looking for a bottom.
- It’s not a good buy signal, so it’s more likely sellers at the midpoint of this bar.
- The bears’ second entry short failed, so we let those traders out. Closing gaps and forgiving tests of failed bars are signs of trading range price action.
- Expect sideways to down next week.
The Daily DAX chart
- The DAX 40 futures went lower on Friday, with consecutive big bear bars closing on their lows.
- The daily chart had a failed wedge bottom bull flag. After a strong close below it, we raced down for a measured move back to 18000 and the prior breakout point.
- The bulls see a trading range after a late-stage bull trend. We have been going more sideways and transitioning into a broader bull channel.
- It is a broad bull channel because traders can swing in each direction.
- The bulls see a sell climax to close the breakout point.
- it is also a test of a second entry short, a double top bear flag that failed. We have now let those traders out.
- Bears are always in short, hit measured move target in two days, and at 18000, which is likely to be supported, it is a profit-taking area.
- Most traders should wait for a second entry long it is sets up.
- More likely a bear spike and channel of some kind as bears try to get below 18000.
- Some bears want a measured move of the two bars together, which would take price back to April. April was a very strong bear leg in a bull trend so reasonable for traders to sell and scale in higher.
- Better to be short or flat and expect sideways to down next week.
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