Market Overview: DAX 40 Futures
DAX futures went sideways last week in a triangle and BOM. We have been oscillating around 18500 in between the two magnets of 19000 and 18000. Limit the order market so most traders do not touch it during this timeframe until there is a clear breakout either way. The daily chart is even tighter, so day traders can do well if they can trade the lower timeframes because the moves are big.
DAX 40 Futures
The Weekly DAX chart
- The DAX 40 futures went sideways last week with a bull doji above the moving average.
- Stop-order bulls got stuck after 4 bull bars, but most would have scaled in at the MA, expecting to make money on the scale-in.
- The bears are still unable to do too much damage below the MA
- But the bars are big and climactic. So, it is a classic trading range; traders buy low, sell high, and talk about quick profits.
- Bears triggered a wedge, but it wasn’t a clean sell. Just 4 dojis for a test of the moving average. They didn’t break the major swing point below 18000 but returned to the last one triggering the trading range.
- Triangle, so there are no strong breakouts either way. When you have a triangle on a time frame, go up and see what’s happening. So we know the monthly is a TTR, which is usually a continuation pattern in a trend.
- It could act as a final flag for one more push-up, but it becomes more and more 50/50.
- Bears are selling above bars, and bulls are buying below bars. This is great for limit-order traders and a struggle for stop-entry traders.
- Most traders should wait for a good breakout and follow through before using stop orders.
- Weak doji this week, so not a great buy above or a great sell below.
- I have to give at least 55% for the bulls because of the trend and the failure for bears to close below the MA.
- Expect sideways to up next week.
The Daily DAX chart
- The DAX 40 futures went higher on Friday with another buy signal above the MA.
- The problem is that the last buy signal triggered and went below that bar, so scale in bulls could get back to the entry. So could be a place to sell, rather than buy.
- But selling a strong bull bar is also not a high-probability idea. It’s in breakout mode and a triangle, and we are waiting for traders to decide on the direction.
- Bears can always argue in short, in this smaller range. Bulls argue that bears never took out the major swing point below 18000.
- Traders buy low and sell high, taking quick profits and not waiting for more than 1:1.
- No one got trapped in this range. As long as you took the wide stop and scaled in, it has been forgiving. Generally, the stop placement is further away than you think.
- Most of the bar is below the MA, and we are in the middle of the range, so it’s not great for anything.
- If you’re stop is around 18000, then you need a breakout to make money, and it’s just not that clear right now.
- I think we are going high but we might need to trap bears first lower.
- Expect sideways next week.
Market analysis reports archive
You can access all weekend reports on the Market Analysis page.
