The DAX fell rather significantly during the session on Wednesday, but found support at the €7775 level. This was the area that we have just broken out, and as a result seen support there would not have been much of a surprise. With that being the case, we believe that buying at this general area is going to be the way to go. The DAX is by far one of the stronger markets in Europe, and as a result we think that the continued upside move will be the order of the day this year. As for selling, we see aptly no reason to do so.
Dax futures saw profit taking as expected but with no sell signal we were buying in to weakness as the safest strategy. Support at 7802 was hit where we predicted a bounce and possible low for the day and this was in fact the exact low.
With US markets higher over night we should be testing the week’s high at 7888 and a break higher should finally hit our target of 7896/7906. This may hold the top for now but a push through here would see us on the way to 7930/33 and then 7988/96.
We continue buying in to weakness as the safest strategy with support at 7835 then 7802 unlikely to be broken at this stage, but a break targets 7776 and maybe the 9 day moving average and short term 61.8& Fibonacci support at 7749. This should be a very good buying opportunity this week.
The DAX had a slightly bullish day after originally falling during the Tuesday session. However, you can see that by the candle on the daily chart that we tested the €7800 level for support and found it. This was an area that had been significant resistance previously, and was the site of the breakout on Friday.
The fact that we have pullback and bounced enough to form a hammer makes this even more bullish of the DAX and believe that European indices in general will do well over the next couple of sessions. The FTSE has broken out beyond comprehension, and it must be said that most of the other indices look very similar in Europe right now. With that being the case, it makes sense that they DAX would take off, as Germany is the epicenter of all things financial and productive in Europe itself.
With this being said, we believe that the currency markets are also showing the potential move as well. After all, the Euro is about the breakout against the US dollar at the 1.35 level, an area that if overcome could lead to a massive move higher. This shows that a lot of money is starting to move back into Europe, and without a doubt most traders and investors will be looking to Germany first, and then to the peripheral countries.
As long as the currency moves are too dramatic, we believe that the DAX should continue to grind higher. Granted, if the Euro appreciates too quickly it could be damaging to corporate earnings, but in reality over time we believe that a higher Euro As Well as a higher DAX should be the norm. After all, the DAX is one of the favored indices around the world for traders.
As for selling this market, we would find it impossible to do until we got below the last cluster of support, somewhere around the €7600 level. Because of this, we think this is a “buy on the dips” type of market now, and we would not only do that but we would be buying a break of the highest from the Tuesday session as well.
Dax futures headed towards our target of 7896/7906 to take profit on longs but halted a little early at 7888. The new high followed by a lower close is an early warning that this market may be running out of momentum and could lead to profit taking today, but there is no sell signal yet. Therefore buying in to weakness may be still be the safest strategy. Support today at 7835/33 but below here look for 7802. We should see a bounce from here and possible low for the day but a break targets 7776 and maybe the 9 day moving average and short term 61.8& Fibonacci support at 7749. This should be a very good buying opportunity this week.
Yesterday’s high should act as resistance again and then we should finally hit our target of 7896/7906. This may hold the top for now but a push through here would see us on the way to 7930/33 and then 7988/96
During the Monday session, the DAX pullback after the massive move we had seen on Friday. This makes sense, as the buyers would have needed to take a rest after the breakout. We feel that the €7800 level is the breakout point, and as a result we should begin to see support as we fall towards that level. Because of this, we are more than willing to buy this market closer to the €7800 level, or a break of the €7875 level which would represent a new recent high. As far as selling is concerned, we have absolutely no interest in doing so in this market.
The DAX had initially fallen during the previous week, but found plenty of support at the €7600 level in order to bounce high enough to breakout finally. Now that we have broken out, it is obviously you should be buying the DAX market at this point in time. The €7800 level has been violated, and in fact been closed above. This is exactly the type of price action that we need to see in order to be confident that the uptrend is going to continue. With that being said, we believe the bombing at this point in time is a reasonable trade.
We have been stating that the DAX look like it was well supported for the last several sessions, and that a breakout could possibly happen. On Friday, we saw that exact scenario unfold. The market is now well over the €1700 level, and is a very strong buy signal at this moment in time.
Because of this, we are looking for any type of pullback or a break of the Friday highs as a signal to start buying into the DAX. As far as selling is concerned, we’ve pretty much had it made clear to us that it can be done. In fact, we believe that this market will go much, much higher now that we have formed a solid base at the €7700 level.
Dax futures held 7660 on the move lower but we are holding the range of the past 3 weeks in a market that is directionless. Outlook is therefore unchanged for today.
Immediate resistance at 7721/24 then 7750. A break above 7769 should then allow a test of 7795/7805 highs for the month and tough resistance today. Exit any longs and try shorts with a stop and reverse in to longs again above 7815 for 7826 and above here a run to 7896/7906 to take profit on those longs.
Failure to get through 7724/21 could take us to 7701 and if we continue lower look for 7676/70. Below 7660 we could retest the lower end of January’s range at 7640/32 for exiting any shorts. Try longs again with a stop below 7620 for a test of good support at 7603/7593 and an excellent buying opportunity.
The DAX had a strong showing for the Thursday session as we bounced off of the 7675 level again. This area looks very supportive, and as a result it would be very difficult to sell this market right now. In fact, it looks like a market that is trying to go sideways in order to collect it’s breath before going higher. With that being the case, we are very bullish of the DAX, and are more than willing to start buying above the €7775 level. As soon as we get a daily close above that level, we would be long yet again.
The DAX had a fairly back and forth session on Wednesday, as the market continues to meander around the €7700 level. The market is currently consolidating between the €7625 area, and the €7775 level. Because of this, it looks like this market is prepped to go sideways for some time and as a result we are simply monitoring what’s going on in Germany at the moment.
We do believe that eventually the DAX breakout to the upside, but we need to wait until we see a daily close above the €7775 level in order to be comfortable buying at this point. Because of this, we are flat of the DAX right now, but ready to get involved if we see signs of bullishness.
Dax futures fell to the 7640/32 support area where we suggested exiting any shorts and trying longs and this worked perfectly as we bottomed at 7633. We have been stuck in a 90 point range since the start of the month but we have unwound overbought indicators and could be ready now for a break higher.
Immediate resistance at 7721/24 but we could open above here to test yesterday’s high at 7750. A break above 7769 should then allow a test of 7795/7805 highs and tough resistance today. Exit any longs and try shorts with a stop and reverse in to longs again above 7815 for 7826 and above here a run to 7896/7906 to take profit on those longs.
Failure to get through 7724/21 could take us to 7701 and if we continue lower look for 7676/70. Below 7660 we could retest that 7640/32 support area for exiting any shorts. Try longs again with a stop below 7620 for a test of good support at 7603/7593 and an excellent buying opportunity.
The DAX futures fell rather sharply during the session on Tuesday, but found no support at the €7625 level in order to form a nice hammer. This suggests to us that the market still has a very upward bias in it, and as a result we simply will not sell it at this point. If we managed to break above the top of the candle for the session, we think that it could signal that €7775 is finally going to give way. If that happens, we think this market is much higher.
The DAX had a slightly positive session on Monday as we continue to churn around the 7750 level. Right now, it appears that we are simply going sideways and trying to catch our breath after the massive move higher over the last couple of months. Because of this, we think that a trade in this market will be difficult right now as we simply are going nowhere.
However, we do think that a move above the 7775 level would signify that we are going much higher, and would become aggressively long at that point. As far as selling is concerned, there’s absolutely no way to do that as this market is simply far too bullish at this point.
Dax futures have been stuck in a 90 point range since the start of the month as we unwind overbought indicators and we could remain in this range for a while longer.
We could head back to support at 7701 and if we continue lower look for 7676/70 but below 7660 we could retest that 7640/32 support area for exiting any shorts. Try longs again with a stop below 7620 for a test of good support at 7603/7593 and an excellent buying opportunity.
7769 should be very tough to beat again today but if we do push higher look for 7795/7805 highs to be tested. Exit any longs and try shorts with a stop and reverse in to longs again above 7815.
Wall Street exchanges were flat for the week as a poor outlook from tech heavyweight Intel offset a better than expected quarterly profit at Morgan Stanley. Still, the S&P 500 was on track for a third week in a row of gains and remained near a five year high. Shares of giant technology company, Intel slumped 6.7% to USD21.17 a day after it forecast quarterly revenue below analysts’ estimates.
The US Department of Labor reported last week that the number of US workers filing new applications for unemployment benefits dropped to its lowest level in five years last week, the latest signal of an improving Labor market. Initial jobless claims declined by 37,000 to a seasonally adjusted 335,000 in the week ending Jan. 12. Meanwhile, the US Home starts data surged in December as housing continues to boost the economic recovery. Housing starts rose 12.1% last month. That was the highest level since July 2008. The DJIA gained 1.2% for the week, while the NASDAQ gained 0.3% for the week. US markets are shuttered today, for Martin Luther King Day, this year it is combined with the Presidential Inauguration. There is very little on the global eco calendar to change markets today, so it is expected that traders will see a quiet bay.
Across the Atlantic in the EU, stocks were little changed as China’s economy accelerated for the first time in two years combined with retail sales and industrial production climbing higher than expected and a gauge of US consumer confidence, known as the Michigan Confidence Survey, unexpectedly declined. Most agree this is due to Washington news over the fiscal cliff and disappointment that lawmakers have not resolved the issues.
The Stoxx Europe 600 Index retreated 0.1% to 287 at the close of trading. The gauge lost less than 0.1% this week. The equity benchmark climbed to its highest level since February 2011 last week amid speculation that US companies’ earnings would exceed. The CAC 40 rose by 0.9%, followed by FTSE however, the DAX lost by 0.1% for the week. A lot appears to be going right in Europe’s financial markets. Greece is no longer a threat, banks are looking stronger, and government borrowing costs are down. Yet Europe’s economy remains in a slump.
In Asia, Chinese consumer stocks rose in New York and the nation’s largest ETF in the US climbed to a two week high after growth in the Asian country’s economy accelerated for first time in two years. Japan stocks rose, with the Topix Index capping its longest weekly winning streak since 1986, after the yen fell below 90 to the USD for the first time in 2 1/2 years. The Shanghai Composite gained 3.3% for the week, followed by Hang Seng (1.0%), Nikkei (1.0%). However, Kospi fell by 0.44%. All eyes are on the Bank of Japan meeting that begins today, and later in the week Chinese HSBC PMI data will keep traders on edge.
The DAX had a negative week over the last five sessions, but remains consolidating above the €7600 level. We recently broken out from the €7500 level and we believe that this last two weeks have simply been the market taking a rest before its next move higher. Looking at the charts, there’s nothing to think that this market is going to suddenly reverse, and the recent action has certainly been very bullish, going all the way back to this past summer. On a break above the €7800 level, we think that this is a screening buy and would become aggressively long. We also would be buying a pullback that shows some type of support between €7500 and €7600.
The DAX 30 fell during the Friday trading hours as we continue to consolidate between €7775 and €7625. With that being said, this is a very bullish market and quite frankly the massive move higher that we’ve seen warrants a rest at this point. Because of this, we certainly wouldn’t sell this market even if we see a breakdown at this point. We simply believe that the real money is going to be made going long in the DAX, and having said that we are simply looking for buying opportunities only at this point.
We believe that the €7600 level should be the bottom of the support just below, and as a result a pullback to that area would be bought by us with enthusiasm. Alternately, if we managed to break above the €7800 level, we think that this breakout will continue much higher.
The DAX 30 futures market had a strong bounce off of the bottom of the gap that we have just filled. The hammer from the Wednesday session set up the bullish action we solve during the Thursday session, and now it appears that we are going to make an attempt to break out and above the €7800 level. It is at that point in time that we are more than willing to start buying the DAX again, as it would show a breakout and a continuation of the massive bullishness we’ve seen over the last couple of months. We fully anticipate this to happen, but we wait until we get that daily close above the €7800 in order to actually pull the trigger.
Dax futures held inside the previous days range to leave the outlook unchanged with 7700 holding the topside and 7640 holding the downside as expected.
7700 is tricky resistance again today and daily charts have a more negative tone now so we could see the market under pressure again. We could head back to support at 7676/70 but below 7660 we could retest that 7640/32 area. Try longs again with a stop below 7620 for a test of good support at 7603/7593. We would expect a low for the day here and quite possibly for the week if this area is seen so this would be an excellent buying opportunity.
A move back above 7705 however sees 7715/21 then 7740/45. Above here look for 7769 but little chance of any higher today.