DAX Forecast February 27, 2013, Technical Analysis

The DAX gapped down at the open on Tuesday, and raced directly towards the support that we see at the 7500 area. Although we did not break down below that area, this does look very bearish. Because of this, the most obvious trade in our opinion is to start shorting this market below the €7500 level. If that happens, we believe that the market will continue much lower, perhaps to the €7000 level by the time it is all said and done. However, we know that it’s going to take a bit of a fight to get below the support area, so we must wait for the daily close. As far as buying this market is concerned, we are not interested now as there is far too much confusion, predicated mainly upon the Italian election results.

 

DAX Forecast February 27, 2013, Technical Analysis
DAX Forecast February 27, 2013, Technical Analysis

Dax March contract Forecast for 26th February 2013

Dax March contract Forecast for 26th February 2013
Dax March contract Forecast for 26th February 2013
Dax rallied a lot further than expected to get very close to a retest of 7888 highs. We now have a double top in place with a target of 7197 in the days and weeks to come. Below 7606 our first target is 7559 then a test of Feb lows at 7536 & further good support at 7528. Watch for a bounce in this band today but a close below the 100 day moving average at 7492 signals continued heavy losses this week.

Any bounce is now a selling opportunity with a downtrend expected to be established. 7690/00 then 7738/48 should act as resistance but above here look for 7775/85 to hold.

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DAX Forecast February 26, 2013, Technical Analysis

The DAX tried to rally during the session on Monday, and even gapped at the opening. However, by the time we reach the highs of the recent rally, the market simply was not strong enough to stay above the €7850 level. Italian elections result certainly would’ve had a negative effect on the market, as we gave back quite a bit of the gains. With this being said, it does look like the market will continue to consolidate and we should try to fall back towards the €7550 level. As for buying, we would need to break new highs in order to do so.

 

DAX Forecast February 26, 2013, Technical Analysis
DAX Forecast February 26, 2013, Technical Analysis

Weekly Overview (18-22.02.2013) – Dollar Rises; UK’s AAA Credit Rating Downgraded: What to Expect this Week?

Speculations about Fed’s asset-purchasing program coming to an end led to an appreciation of the greenback on the Forex market. The euro lost more than 170 pips against the dollar and the EUR/USD ended the week at 1.3186. Additional ‘’stimuli’’ for the single currency sell-offs were triggered by the weak economic data coming from the Eurozone and the uncertainty surrounding elections in Italy. GBP/USD losses were even more depressing as the currency pair closed in Friday’s trading at 1.5245, or with a weekly loss of over 270 pips. The dark clouds over Britain are far from gone, particularly after rating agency Moody’s cut the UK from its highest rating to Aa1 as the market closed on Friday. The UK has been stripped from its top AAA rating for the first time since 1978 amid poor economic results and future outlooks as well as rising debt load. The sterling is expected to dip even further as the markets open on Monday.

Capital markets also reacted quickly to news of Fed’s possible plans to reduce the pace of asset purchasing. During Wednesday night’s trading session, one hour was enough for the major US indices to erase more than 1% of their value. However, by the end of the week, most investors’ concerns faded away and changes were minimal. The USSPX500 and the technological USTECH100 closed with minimal losses, while the blue-chip US30 crossed again the psychological level of 14,000 on Friday, closing at 14,003 points.

More optimism was surrounding the European indices. The EUGERMANY30 and the EUFRANCE40 rose by 1.26% and 1.83%, respectively, while the EUSPAIN35 and the UK100 increased their values by 0.10% and 0.69%, respectively.

Precious metals dipped further in their decline. Gold lost ground for another consecutive week – this time by 1.77% – settling at $1,580 per troy ounce at the end of the session. Silver experienced an even bigger fall, ending the week with more than a 3.5% loss, closing Friday’s session at $28.76.

This week offers a wide range of important economic and political events. The election results in Italy will be released on Monday. On Tuesday and Wednesday, Ben Bernanke is due to appear before Congress, particularly focusing on the QE (quantitative easing) program. His speech will be crucial for the market movements over the next few weeks. The GDP figures for both the UK and the US will be out on Wednesday and Thursday, respectively, which will further heat up the markets.

Source: dfmarkets.co.uk

Disclaimer: The Content of these charts and analyses does not constitute any form of advice or recommendation by Delta Financial Markets to buy, sell (or refraining from making) any trade or investment. You may wish to seek independent advice before entering into transactions.

Delta Financial Markets shall not be held liable by you or any others for any decision made or action taken by you or others based upon reliance on or use of information or materials obtained or accessed through use of these technical analyses and charts. DF Markets assumes no responsibility for errors, inaccuracies or omissions in these materials, nor shall it be liable for damages arising out of any person’s reliance upon the information on this page. DF Markets shall not be liable for any special, indirect, incidental, or consequential damages.

Dax March contract Forecast for 25th February 2013

Dax March contract Forecast for 25th February 2013
Dax March contract Forecast for 25th February 2013
Dax headed higher as hoped but broke our upper 7666/72 target to hit resistance at 7700/10. We could continue higher today to 7736 & possibly as far as 7753. This should be the limit for the bounce & a chance to enter medium term shorts with a downtrend starting to be established.

Support at 7672/70 then 7645 but below here 7619/13 should hold at this stage.

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Equity Markets Recap

Equity Markets Recap
Equity Markets Recap

At the end of last week the S&P Index capped its first weekly decline of the year, after reaching the highest level since October 2007; amid increasing concern the Federal Reserve will curtail its stimulus program. Equities rebounded on the last day of the week as German business confidence rose more than estimated. The S&P fell 0.3% for the holiday-shortened week to 1,515.60. On the other hand the Dow Jones advanced 18.81 points, or 0.1%, to 14,000.57. Wall Street fell as FOMC committee members said the central bank should be ready to vary the pace of their $85 billion in monthly bond purchases, according to minutes of the Fed’s latest meeting. Concern over the risks and benefits of further quantitative easing helped give the S&P its largest two-day decline since November. Eco data in the US showed that applications for unemployment benefits in the U.S. rose for the first time in three weeks, returning to levels seen prior to the holiday period and indicating little change in the pace of firings. Jobless claims increased by 20,000 to 362,000 in the week ended Feb. 16.

At the end of the trading week the UK lost its AAA credit rating by Moody’s Investors Service, which cited the continuing weakness in the nation’s growth outlook and the challenges that presents to the government’s fiscal consolidation program. The rating on the U.K. was lowered one level to Aa1 from Aaa and the outlook on the nation’s debt changed to stable, Moody’s said in a statement today. With the U.K.’s high and rising debt burden, deterioration in the government’s balance sheet is unlikely to be reversed before 2016. The pound slumped after the downgrade in the last half hour of trading dropping 0.6 percent to $1.5163. Sterling has depreciated 5.6 percent this year, the second-worst performer after the yen among 10 developed-market currencies tracked by Bloomberg. Explaining the main reason for the downgrade, Moody’s said “the UK’s economic growth will remain sluggish over the next few years due to the anticipated slow growth of the global economy and the drag on the UK economy from the ongoing domestic public- and private-sector deleveraging process.”

London’s FTSE 100 index of leading companies added 0.70 percent to close at 6,335.7 points, while Frankfurt’s DAX 30 rose 1.03 percent to 7,661.91 points and in Paris the CAC 40 jumped 2.25 percent to 3,706.28 points. European stock markets rebounded while the euro slid against the dollar on Friday as traders welcomed improving economic fortunes in Germany and looked ahead to weekend elections in indebted eurozone nation Italy. The euro tumbled to trade at 1.3188

A contraction in the German economy at the end of last year was a hiccup, analysts said on Friday, as data showed business confidence in Europe’s economic powerhouse soaring this year. The federal statistics office confirmed an earlier estimate that German gross domestic product (GDP) contracted by 0.6 percent in the final quarter of 2012, weighed down by a 2.0-percent slump in exports. Nevertheless, a whole range of experts — from analysts to economic think tanks, the government and even the Bundesbank — are convinced that the dip in growth will prove only temporary and GDP will start growing again as early as the first quarter of 2013. Economic sentiment in Germany could hardly be better. Earlier this week, the key ZEW barometer of investor confidence rose to levels last seen before the start of the three-year-old debt crisis. And on Friday, the even more closely watched Ifo business climate index notched up its strongest gain in two and a half years to hit its highest level since April 2012.

DAX forecast for the week of February 25, 2013, Technical Analysis

The DAX rallied in trying to break above the €7800 level during the previous week, but as you can see by the chart it failed in its attempt, and formed a shooting star for the second week in a row. Because of this, it looks very weak at this point in time, and we think that perhaps the market is going to start falling from here. We have a very obvious level that is acting as support in the €7500 level, and a move below that we believe in church the market back into the consolidation zone that and that the €7200 level.

Regardless, we think that the market is still in a nice uptrend, but would become very worried below €7200. This is essentially because it would confirm a turnaround in momentum, and have the market selling often a much more drastic fashion. It should be said that the core of Europe suddenly looks a little bit on the weak side, so it’s still a little early to discern whether or not this is a pullback, or some type of trend change.

We believe that as Germany goes, so goes Europe. Because of this, we think that the DAX, although would hold up better than the rest of the continent, could show significant weakness going forward. On the other side of the trade however is the realization that a move above the €7900 level as this market going much higher as it is significant resistance.

Looking at the overall trend, it can be easily said that this is a simple pullback so far, and that the market is a little bit overextended at this point. That of course is a fair argument; they cannot be help but notice that the bond yields in various European countries are starting to rise again, and that the whole European fiscal problem seems to be coming back into focus as far as the markets are concerned. It’s almost like another replay of last year, and as a result we think that a move below the €7500 level really could send this market much lower, at least of the €7200 level. Below there, things get really ugly, really fast.

 

DAX forecast for the week of February 25, 2013, Technical Analysis
DAX forecast for the week of February 25, 2013, Technical Analysis

DAX Forecast February 25, 2013, Technical Analysis

Looking at the DAX, it’s easy to see that the Friday session was a little bit of anomaly. Ranges fairly tight, but we are still well within the confines of the consolidation area that the market has been trading in. We see the study €7500 level as a significant support level, and as such would begin selling aggressively below that level on a daily close. Alternately, we see quite a bit of resistance in the form of the shooting star that was formed on Wednesday, and as such would become aggressively long of this market above the €7800 level.

 

DAX Forecast February 25, 2013, Technical Analysis
DAX Forecast February 25, 2013, Technical Analysis

Dax March contract Forecast for 22nd February 2013

Dax March contract Forecast for 22nd February 2013
Dax March contract Forecast for 22nd February 2013
Dax tested last week’s low at 7570 & bounced from 7560. We tested the 8 month uptrend & although pierced we held above by the close. We now expect a move higher today to 7612 & then on to 7646. We could even make it as far as 7666/72. However here we are looking for a high to the rally. The longer term charts are starting to turn worryingly negative & we can use this rally over the next 1-2 days to enter medium term shorts as we look for a break of the uptrend next week & possible a heavy sell off in March.

Support at 7570/60 today. If this area does not hold today we could see 7536/30 next & a low possible. However a break signals we are ready for the next big leg lower with 7507 & 7487 as initial targets.

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DAX Forecast February 22, 2013, Technical Analysis

The DAX had a horrific looking Thursday session as the market lost almost 2%. Looking at the chart, you can see that the €7550 level has served as significant support recently. However, it looks like we are testing that area, and if he gives way, and we would also suggest that extends down the €7000, we could see a significant selloff. France looks ugly, as does many of the other European indices, so we’re not necessarily convinced that the DAX will hold. However, we have to wait until that is proven by a daily close, or perhaps a generated buy signal based upon a hammer or something like that could change her mind. In the meantime though, this market simply looks very ominous.

 

DAX Forecast February 22, 2013, Technical Analysis
DAX Forecast February 22, 2013, Technical Analysis

Dax March contract Forecast for 21st February 2013

Dax March contract Forecast for 21st February 2013
Dax March contract Forecast for 21st February 2013
Dax challenged tough trend line & short term Fibonacci resistance at 7780/87 & failed here

Good support seen at 7671/66 today with a bounce possible but below 7650 look for 7619/13. If this support fails & we break yesterday’s low at 7609 we should test important 9 month uptrend support at 7583 with last week’s low at 7570. If this area does not hold today we could see 7536 next.

If we can hold 7712 we hit resistance at 7733 then 7750/53 before yesterday’s resistance at 7780/87 for trying shorts. Only if we can clear 7800 we should see 7835/38 then 7856.

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DAX Forecast February 21, 2013, Technical Analysis

The DAX rose initially during the session on Wednesday, but ran into significant trouble at the €7800 level in order to fall and form a shooting star. Because of this, we do not feel as confident as we did just 24 hours ago in this market. In fact, the breaking of the lower part of the range for the Wednesday session would technically be a sell signal. We think the €7700 level will have to hold in order to see bullishness in this market. Otherwise, you would be looking at a sideways grind, with a somewhat negative bias. However, it must be said that we break the top of the Wednesday shooting star; this is an extraordinarily bullish sign.

 

DAX Forecast February 21, 2013, Technical Analysis
DAX Forecast February 21, 2013, Technical Analysis

Dax March contract Forecast for 20th February 2013

Dax March contract Forecast for 20th February 2013
Dax March contract Forecast for 20th February 2013
Dax smashed through all resistance reaching 7765. We now face quite tough trend line & short term Fibonacci resistance at 7780/87 but with the daily picture now much more positive, if we can clear 7800 we should see 7835/38 then 7856.

Support seen at 7720 then 7696/91 below could hold a slide. Below here 7658 looks a good buying opportunity with stops below 7640.

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DAX Forecast February 20, 2013, Technical Analysis

The DAX had a phenomenal session during the trading day on Tuesday as the German and the European ZEW numbers came out much better than expected. Because of this, confidence seems to have returned to Europe, and especially Germany. With that in mind, it makes sense that the DAX was one of the strongest markets in the world during the session.

Looking at this chart, it appears that buying on pullbacks can be done now that it looks as if the €7600 level is going to hold. We believe that eventually we will test the highs at the €7900 range, and as a result we are willing to buy pullbacks on shorter time frames.

 

DAX Forecast February 20, 2013, Technical Analysis
DAX Forecast February 20, 2013, Technical Analysis

DAX Forecast February 19, 2013, Technical Analysis

The DAX had a positive session during the Monday trading hours, as the €7550 level offered support. The market looks like it’s trying to for some type of base at this point, and as a result we are not ready to start selling even though it starts to look a little bit weak lately. We believe that the consolidation should offer more of a buying opportunity, but having said that we need to see it right type of supportive candles in this general vicinity in order to start buying again. As far shorting is concerned, we would have to be well clear of the €7500 level in order to consider it.

 

DAX Forecast February 19, 2013, Technical Analysis
DAX Forecast February 19, 2013, Technical Analysis

Dax March contract Forecast for 18th February 2013

Dax March contract Forecast for 18th February 2013
Dax March contract Forecast for 18th February 2013
Dax futures held resistance at 758/61 as expected & hit the 7579/76 target & low for the day as predicted, bottoming at 7570.

We watch for a break today to take us towards Feb lows at 7536. Good support from here down to 7525 should be a bargain buying opportunity but we need a stop below 7510 for a test of 100 day Moving Average at 7470.

The top side looks limited with resistance at 7611/14 then 7637 & 7658/61 likely to hold any strength again. However above here 7691/96 is another tough obstacle but a break allows another test of the recent high at 7728/39

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DAX forecast for the week of February 18, 2013, Technical Analysis

The DAX printed in absolutely horrible looking candle for the week, but it should be noted that we are sitting just above a fairly significant support level in the form of €7500. Because of this, we are not ready to start selling yet, and do recognize the fact that we could see a potential support area just below, of course making a short sale very difficult to pull off. Looking at this chart, we actually expect to see some type of supportive candle just below in order to start buying again. However, we do not have that set up yet, so we are flat.

 

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DAX Forecast February 18, 2013, Technical Analysis

The DAX fell for the session on Friday, closing just below the €7600 level. The market has looked fairly weak lately, and those foretell of possible further weakness. However, we do see the €7500 level as a significant support area, and as such we think that this market could be ready to take a little bit of a bounce going forward. If it doesn’t, and we close below the €7500 level, we think this market reverses drastically and we start to selloff fairly aggressively. Otherwise, supportive candle will be bond between here and €7500.

 

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Dax March contract Forecast for 15th February 2013

Dax March contract Forecast for 15th February 2013
Dax March contract Forecast for 15th February 2013
Dax futures failed just below 7734/39, our selling opportunity & collapsed in spectacular style allowing us to buy in to longs down to 7614/11. We bottomed just here at 7606 as expected.

7611/06 could be tested again today with a risk of a break lower to 7579/76. A low for the day is possible here but watch for a break to take us towards last week’s low at 7536. Good support from here down to 7525 should be a bargain buying opportunity but we need a stop below 7510 for a test of 100 day Moving Average at 7470.

The top side looks limited with resistance at 7658/61 but above here 7691/96 is another tough obstacle. A break however allows another test of the week’s high at 7728/39.

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DAX Forecast February 15, 2013, Technical Analysis

The DAX had a negative showing on Thursday as the push lower continued. The market lost over 1%, and as a result it looks as if the DAX once to go lower. We still believe in the longer-term story when it comes to Germany, but perhaps a pullback to the €7500 level is about to happen. With this being the case, we are not interested in being in this market because we believe in the longer-term bullish case, and therefore do not would be in a short-term sell position. All things being equal, we believe that a supportive candle somewhere just above the €7500 level will lead to a significant bounce higher. Alternately, if we made to clear the €7750 level on a daily close, that would be enough for us to be convinced of the upward momentum being stronger now.

 

DAX Forecast February 15, 2013, Technical Analysis
DAX Forecast February 15, 2013, Technical Analysis