Market Overview: DAX 40 Futures
DAX futures went lower last week, with a bear surprise bar closing near its low. A strong reversal at the end of last week, and there should be a bit more sideways to down after. The bulls failed to get strong buying for a new high, so we will likely oscillate around these big round numbers further.
DAX 40 Futures
The Weekly DAX chart
- The DAX 40 futures went lower last week, with a bear surprise closing near its low.
- It is a big bar, so traders expect something smaller with a volatility contraction next week.
- The double surprise would be if it got more follow-through down.
- Bulls had 4 bars up, so they likely expect one more bar next week.
- Because of inertia, buying the MA in a bull channel is a high-probability trade.
- Traders bought 18000 last time; will they buy it again?
- The bears see two shots at 19000 big round number.
- The bulls had a bull channel and 3 legs up. The bears triggered a weak reversal signal bar that went a long way back to 18000. So, it was reasonable that bulls were ready to sell out of their longs.
- The channel is quite tight. So, it is unclear what trendline was broken. I suspect we will go sideways to up from here.
- Bears still haven’t closed a bar across the moving average, so it’s not that bearish yet.
- Bears are selling above bars, and bulls are buying below bars.
- However, last week, it closed at its lowest, so it’s better to wait to see the FT before buying.
- Bulls see a test of the inside bar long entry that went at least 2:1.
- Before that, it was a bear microchannel, and bears might have sold above it expecting more down and got trapped. So now we are letting them out.
- Expect sideways to down next week.
The Daily DAX chart
- The DAX 40 futures plunged into Friday with a big bear bar closing near its low.
- It is a 5-bar bear microchannel and the sixth consecutive lower high- bad news for bulls.
- The bears will expect a second leg sideways to down.
- The bulls had three legs up and a wedge bull flag to break above the sell climax, but there weren’t enough new bulls.
- The bulls needed one more bar breakout and follow-through above that sell climax, but the stop was too far away, most likely.
- Back down into the lower third of a trading range, so a buy zone, but no signal for bulls yet.
- It will likely also find sellers if we go above the prior bar.
- Bulls bought the low of that bull spike and will scale in, likely making money on that second entry.
- It looks like we will visit 1800 again, so we could just climax there as well.
- There are no bears trapped down there who couldn’t exit breakeven, so it could be all new bears selling and scaling in higher.
- It’s always in short now, with two consecutive big bear bars closing on their lows, below the MA, and below the bull swing point from last week.
- Expect sideways to down next week.
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