Market Overview: DAX 40 Futures
DAX futures moved sideways to down last week with a bear close under the MA but could not get far below just yet. The bulls want this to be a bull flag, and then BO and move back to test the highs. The bears see a HTF trading range, and we are at the highs, so the math favours selling. But did they take out any ‘significant higher lows’ yet? They have barely closed the closest gaps, that’s why there is hesitation perhaps.
DAX 40 Futures
The Weekly DAX chart
- The DAX 40 futures had a small bear close under the MA.
- The bulls see a bull channel, an expanding triangle and as we are going sideways – maybe for too many bars now – it’s probably 50/50.
- Bulls want a 20-bar MA Gap buy setup to form so they can get a test of the high.
- But 3 bear bars down is disappointing, so if we do get up there, we can expect sellers above.
- Bulls are disappointed with the tails on the bars over the past few weeks – they might be expecting the bears to get one more leg.
- The bears see a failed BO above the ATH, a DT and a test, so a wedge top. But they need a LH before they can do too much damage.
- We might be forming a bull flag, and bears want a break below it – which happens less frequently. Sealing it requires a BO and FT below the lowest bull bar.
- The bulls will probably get to scalp out and then move down.
- It is a triangle, so we went above the highs and below the lows – mostly limit order traders now.
- Most traders should wait for a reasonable sell setup below the MA or a good buy setup above the MA. A bear close below the MA is good, but the tail reduces the probability.
- Limit order traders will probably buy below the inside bar from 2 weeks ago, betting the BO won’t go far.
- I think 15500 will need to get tested, as there are a couple of trendline projections and magnets below. A big tail and a reversal would be a good buy setup if the bulls are there.
- Expect sideways to down next week.
The Daily DAX chart
- The DAX 40 futures was a small bull doji with a big tail below on Friday.
- It is a weak buy signal so that more sellers might be above.
- It is a bear microchannel, and the H1 fade was a good trade. Will there be a small second leg or was that it?
- The bulls see a strong level of support here, so there are probably buyers below somewhere.
- The bulls got a strong bull microchannel with gaps breaking above the MA so we can expect buyers below that.
- But 5 bear bars down is disappointing, so they might not stay past the top of the climax – even with the bear close.
- Bulls still have gaps below, and the HTF will have strong buying pressure – but for now, the trading range price action is expanding and might need to go down to find more buyers.
- Bulls see a possible MTR, a HL DB and the bull leg broke the trendline, so they want a bigger leg than before. So far, there is no buy signal for them just yet.
- Most traders should wait for a strong buy signal above the MA.
- For sellers, there are likely buyers below that tail, so they might need to wait for something more conclusive.
- Bulls have a H2 setup, but might need consecutive bars to convince traders to swing up. The first reversal might be minor.
- Expect sideways to down next week.
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