#202435 - priceactiontds - weekly update
Good Evening and I hope you are well.
tl;dr
dax: 18700 was my upper target for the week and the high was 18730. Market now created 3 legs up but we don’t know high leg 3 can get. There is no reason to assume bears will begin stronger selling. If 18730 holds next week, consider me surprised. A bigger pullback after a 9% move up is expected but as of now, there are no facts to base this on. Shorting into a strong bull trend is a losing strategy in the long run. Targets for bulls are 18800, 18900 and obviously the ath at 19204. Bears would need to get below 18400 to have better arguments on their side.
Quote from last week:
Info: Will post the weekly updates on the DAX Index from XETRA and only daily updates on DAX futures. Everyone who trades futures should be able to cope with the fact that it’s a 60 point difference atm.
comment: Bulls went mostly sideways until Friday which means that bears are still not doing much. Friday produced another breakout for W5, where my target is still 18800ish. Low probability the bear trend line from the ath will hold again. If bulls can get this above 18800, there is no reason to not print a new ath. Bears would need consecutive bear bars below 18500 to stop it. Bulls should not have the illusion that this is something other than a short squeeze. This is not buying on higher volume due to more market participants wanting in on the next bull run to 30000. This will crumble soon enough but for now it’s only going up and you should never fight the trend.
current market cycle: Bull trend inside bigger trading range. We are in the last leg of this trend and no one should be surprised if we close August below 18000
key levels: 17000 - 19000
bull case: Bulls hardly meeting any resistance by the bears on the daily chart and they dance as long as the musics plays. They know the rally is climactic and a deeper pullback can happen anytime. They want to break the bear trend line from the ath and print a new one but they would need to find much more buyers above 18700. The rally was more bears stepping aside than strong bulls buying. On the weekly and monthly chart we are at the high of this bull wedge and market bounced just shy of the monthly 20ema 2 weeks ago. If bulls close the month above 18550, it would be another buy signal.
Invalidation is below 18350.
bear case: Any bull buying above 18700 buys into previous resistance, near measured move target and at the bear trend line that held since May. No matter how you look at this, it is a bad buy. The rally is climactic without any pullbacks. Market only stalled for 1-2 days at most before breaking out again. Bears see all that and atrocious volume. They know it’s a short squeeze and that it can reverse fast. Right now they aren’t doing much but above 18700 bigger bears begin scaling into shorts again and if the market stalls enough, many bulls want to secure their profits before they vanish. Bears first target is 18500 and for the market to go sideways and start making lower highs and lower lows again. One more thing that’s easier to see on xetra than on futures is the monthly closes. Xetra has no close above 18510. Will this month be different? I doubt it. Also a clear ascending triangle if you take only bar bodies into account.
Invalidation is above 18750.
outlook last week:
→ Last Sunday we traded 18322 and now we are at 18633. Neutral was wrong, market produced only 1 bear bar and even that could not get below the previous day’s low. Bad outlook.
short term: I will not get bullish at 18633 when market could not close one month above 18510. I rather wait and scalp than to buy into a potential high. Rally went mostly without me but that’s ok. It’s about not losing first, then making some, then making the big bucks. Neutral going into next week. If bulls break above 18700, will scalp long for ath test.
medium-long term: Market is right at the bear trend line from the ath. Decent chance we make a new one but I am much more certain that we will see 17000 in 2024 again. Will update more here next Sunday.
current swing trade: Nope but I think we are getting close for me to short this again.
chart update: Swapped dax futures to dax xetra and only left the most important prices on the chart and the 5 wave series. If we get a w5 in the same ballpark as W1 and W3, it could get us above 19000 but as of now, the bear trend line is valid.
tl;dr
dax: 18700 was my upper target for the week and the high was 18730. Market now created 3 legs up but we don’t know high leg 3 can get. There is no reason to assume bears will begin stronger selling. If 18730 holds next week, consider me surprised. A bigger pullback after a 9% move up is expected but as of now, there are no facts to base this on. Shorting into a strong bull trend is a losing strategy in the long run. Targets for bulls are 18800, 18900 and obviously the ath at 19204. Bears would need to get below 18400 to have better arguments on their side.
Quote from last week:
bull case:Last Sunday I wrote about mostly overlapping bars for the bulls and since Thursday they left no doubt that this was not the start of the bear trend. Huge bull breakout above the previous bear gap to 18200 and they are not right at the minor bear trend line from mid July. If bulls are really strong, they can get a third push up and maybe a measured move from Thu/Fri which would bring us to 18800ish. The buying is climactic though and a pullback is expected over the next 1-2 days. Best for bulls would be if they would stay above 18000 and the daily ema/bull trend line.
Info: Will post the weekly updates on the DAX Index from XETRA and only daily updates on DAX futures. Everyone who trades futures should be able to cope with the fact that it’s a 60 point difference atm.
comment: Bulls went mostly sideways until Friday which means that bears are still not doing much. Friday produced another breakout for W5, where my target is still 18800ish. Low probability the bear trend line from the ath will hold again. If bulls can get this above 18800, there is no reason to not print a new ath. Bears would need consecutive bear bars below 18500 to stop it. Bulls should not have the illusion that this is something other than a short squeeze. This is not buying on higher volume due to more market participants wanting in on the next bull run to 30000. This will crumble soon enough but for now it’s only going up and you should never fight the trend.
current market cycle: Bull trend inside bigger trading range. We are in the last leg of this trend and no one should be surprised if we close August below 18000
key levels: 17000 - 19000
bull case: Bulls hardly meeting any resistance by the bears on the daily chart and they dance as long as the musics plays. They know the rally is climactic and a deeper pullback can happen anytime. They want to break the bear trend line from the ath and print a new one but they would need to find much more buyers above 18700. The rally was more bears stepping aside than strong bulls buying. On the weekly and monthly chart we are at the high of this bull wedge and market bounced just shy of the monthly 20ema 2 weeks ago. If bulls close the month above 18550, it would be another buy signal.
Invalidation is below 18350.
bear case: Any bull buying above 18700 buys into previous resistance, near measured move target and at the bear trend line that held since May. No matter how you look at this, it is a bad buy. The rally is climactic without any pullbacks. Market only stalled for 1-2 days at most before breaking out again. Bears see all that and atrocious volume. They know it’s a short squeeze and that it can reverse fast. Right now they aren’t doing much but above 18700 bigger bears begin scaling into shorts again and if the market stalls enough, many bulls want to secure their profits before they vanish. Bears first target is 18500 and for the market to go sideways and start making lower highs and lower lows again. One more thing that’s easier to see on xetra than on futures is the monthly closes. Xetra has no close above 18510. Will this month be different? I doubt it. Also a clear ascending triangle if you take only bar bodies into account.
Invalidation is above 18750.
outlook last week:
short term: Absolutely neutral. Big up, big down, big confusion.
→ Last Sunday we traded 18322 and now we are at 18633. Neutral was wrong, market produced only 1 bear bar and even that could not get below the previous day’s low. Bad outlook.
short term: I will not get bullish at 18633 when market could not close one month above 18510. I rather wait and scalp than to buy into a potential high. Rally went mostly without me but that’s ok. It’s about not losing first, then making some, then making the big bucks. Neutral going into next week. If bulls break above 18700, will scalp long for ath test.
medium-long term: Market is right at the bear trend line from the ath. Decent chance we make a new one but I am much more certain that we will see 17000 in 2024 again. Will update more here next Sunday.
current swing trade: Nope but I think we are getting close for me to short this again.
chart update: Swapped dax futures to dax xetra and only left the most important prices on the chart and the 5 wave series. If we get a w5 in the same ballpark as W1 and W3, it could get us above 19000 but as of now, the bear trend line is valid.
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