Market Overview: DAX 40 Futures
DAX futures was a Dax bear inside bar at the 13000 big round number. Although the bear trend is still in effect we have been going sideways for a few weeks now. The bulls are starting to get daily consecutive bull bars so we might see a break next week. The bears will sell it as a bear trap, but the late bears buying back shorts might give the bulls momentum to get up to the June 28th high.
DAX 40 Futures
The Weekly DAX chart
- The Dax 40 futures weekly chart was a Dax bear inside bar at the 13000 big round number.
- It is the fourth consecutive bar with long tails below so we are likely transitioning into a trading range.
- The bulls see a lower low, double bottom major trend reversal with March 7th. They want a bull bar to setup a High 1 buy at the bottom of a trading range.
- It’s a tight channel down so it might be the second entry that works.
- The bulls know it has been a long-term bull trend and the lower we move is just the edge of a longer-term channel. The bears will give up soon, and they might be starting to do so now.
- They want consecutive bull bars and a move back up to the moving average.
- The bears see a broad bear channel and possibly completion of a measured move, harmonic down to 11500. Each week we have said it looks far away but we are still working towards it.
- They see a 6-bar tight bear channel and so expect the first reversal to be minor. The bears will also sell the first bar to go above a prior bar as a reasonable pullback.
- It’s a trading range so it’s confusing. The bull trap could have follow-through only to fail at the moving average. A bear break below might reverse like last week.
- Expect sideways to down next week.
The Daily DAX chart
- The Dax 40 futures daily chart was a bull bar on Friday closing on its high so we might gap up on Monday.
- For the bulls, it’s the second reversal up and a possible double bottom with March 7th.
- Last week’s wedge overshoot played out for a scalp for the bulls, so a second entry buy low in a trading range is a reasonable buy setup
- They want a break above last week for a measured move-up. I’ve drawn the harmonic move possible which still keeps the overall bear trend and assumes a moving average gap bar sell.
- For the bears, it is a small pullback bear trend with 20+ bars below the moving average, we can expect sellers above and at the average.
- They see 4 consecutive bear bars last week so Friday is a pullback for a leg to continue lower.
- The bears are running out of steam and might need a move higher to attract more sellers. We have been sideways for a few weeks now and the tails above and below show unwillingness to sell far below.
- If the bulls can get consecutive bull bars early next week they might get a second leg up to the 50-day MA. We can expect more sellers up there.
- If the bears get another leg it will make a triple bottom and wedge low in a trading range, so they will either need to get follow-through or give up.
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Nice analysis report especially covering both bull and bear perspective following Friday big bull bar.