Market Overview: DAX 40 Futures
DAX futures went higher last week with a small bull bar at the 18000 magnet. It’s a pullback and a pause after a big volatility expansion last week. Always in short on the daily chart and lower third of a trading range on the weekly, so probably buyers not far below. But no strong buying yet so likely sideways to down next week.
DAX 40 Futures
The Weekly DAX chart
- The DAX 40 futures went higher last week with a small bull bar at the 18000 magnet.
- Traders expected something small after such a big bear climax down to the MA and 18000.
- Bulls argue about the bull channel, and they want a symmetrical third leg up to the first two spikes.
- But bears see they broke a swing point, the inside bar doji, in April. That’s a sign of a trading range.
- At the time I said I expected the price to come back and test these little dojis so I was not surprised. That’s why sellers above that pullback were also likely after the bull climax.
- So, three climaxes in the past few months are signs of sideways behaviour and not trending behaviour.
- 5 bars down for the bears, so they might get one more bar.
- Its a bull inside bar so 50/50, but better RR for the bulls buying low in a TR in a bull channel.
- But I don’t think we are going straight up to 19000 after such a strong climax.
- So that means a second leg/bar for bears and a follow-through for bulls.
- If the bears can get a big bear bar now, that would shift it back to more down.
- A 65% pullback is a good sign of a trading range, and we are near the bottom. So, if you sold that big bear bar, you’re disappointed and should probably get out.
- Selling at the MA in a bull channel is not a high-probability trade. Price went to where there were more buyers, right at the MA.
- If you buy, you should be open to scaling in.
- Price is holding above the 18000 magnet which is interesting.
- So, buyers are likely not far below the MA, as no bar has closed below the MA in over 30 bars, so it’s an environment that encourages buying.
- Expect sideways to up next week.
The Daily DAX chart
- The DAX 40 futures went sideways to up last week.
- It finished with a small bear inside bar, which closed above its midpoint.
- Bulls see a double bottom with a strong bull spike and support at 18000.
- Bears see a failed wedge bottom, a bear breakout below and always in short and now a pullback. They will likely get a second leg sideways to down.
- The bears got good follow-through but will it get a 1:1 down?
- The issue for the bulls is the pain trade – if that strong bull spike fails, that sets up a much larger measured move down.
- But considering the weekly bullishness – sideways, I think bears will get disappointed not far below here.
- Likely sellers above near the MA, and the test of the underside of the wedge.
- The bulls have gaps to those buy signal bars and will become sellers not far above where we are.
- Too low to sell and not a great buy, so expecting sideways next week.
- If you’re a bull, you see the swing low and have great risk reward up to the midpoint/high of the range.
- We did find a lot of buyers at 18000 to the left and we are finding more again. So bears might have a hard time breaking too far below it.
- Always in short, so expect sideways to down next week.
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