2024-05-16 - a daily price action after hour update - dax/
Good Evening and I hope you are well.
overall market comment
Bulls rallied to another ath where many of them took profits and bears began shorting after a lower high. The selling on bigger volume into the close is a sell signal going into tomorrow. Bulls have to break out of the formed bear channels to make bears doubt the highs might be in. Since tomorrow is Opex, everyone is max bullish and VIX is at the lows, we could be in for a surprise tomorrow.
dax
comment: Bear trend from before the open, after Globex made a new ath 19006. Since it’s the end of the week, the open, low and high prices of the week are important to watch. I always mark them on my charts when they occur.
current market cycle: trading range - bulls broke 19000 but no follow through, if we close this week below 18900, we got a higher high but inside a trading range and odds favor that we trade down to 18000 again.
key levels: 18738 - 19006
bull case: Bulls began to take profits and today’s selling was without any stop which makes me believe that big institutions are off-loading their positions while they can. Low of the week was 18738 and that should be bulls last hope for tomorrow. If they can not hold that level, we probably trade down to 18600 and below that is 18400.
bear case: Bears created a sell signal on the daily chart going into tomorrow. The weekly and monthly charts now show big tails above and if we can close below 18900, that would be a second rejection of that level on the weekly chart. Last time we made a new ath we sold off for 1280 points so that is my base assumption for the next weeks.
short term: Bearish - But can see a retest of the highs if bulls break strongly above the 1h 20ema tomorrow. 18738 must hold or we could crash down.
medium-long term: My long term outlook stays bearish and I expect at least a -20% correction in 2024. Medium term is 17100 while I think we can touch the big bull trend line starting 2022-10 around 16700 in 2024. —unchanged
trade of the day: EU open could not get a close above the 15m 20ema and had many tails above bars. Could have sold anywhere with stop new ath.
overall market comment
Bulls rallied to another ath where many of them took profits and bears began shorting after a lower high. The selling on bigger volume into the close is a sell signal going into tomorrow. Bulls have to break out of the formed bear channels to make bears doubt the highs might be in. Since tomorrow is Opex, everyone is max bullish and VIX is at the lows, we could be in for a surprise tomorrow.
dax
comment: Bear trend from before the open, after Globex made a new ath 19006. Since it’s the end of the week, the open, low and high prices of the week are important to watch. I always mark them on my charts when they occur.
current market cycle: trading range - bulls broke 19000 but no follow through, if we close this week below 18900, we got a higher high but inside a trading range and odds favor that we trade down to 18000 again.
key levels: 18738 - 19006
bull case: Bulls began to take profits and today’s selling was without any stop which makes me believe that big institutions are off-loading their positions while they can. Low of the week was 18738 and that should be bulls last hope for tomorrow. If they can not hold that level, we probably trade down to 18600 and below that is 18400.
bear case: Bears created a sell signal on the daily chart going into tomorrow. The weekly and monthly charts now show big tails above and if we can close below 18900, that would be a second rejection of that level on the weekly chart. Last time we made a new ath we sold off for 1280 points so that is my base assumption for the next weeks.
short term: Bearish - But can see a retest of the highs if bulls break strongly above the 1h 20ema tomorrow. 18738 must hold or we could crash down.
medium-long term: My long term outlook stays bearish and I expect at least a -20% correction in 2024. Medium term is 17100 while I think we can touch the big bull trend line starting 2022-10 around 16700 in 2024. —unchanged
trade of the day: EU open could not get a close above the 15m 20ema and had many tails above bars. Could have sold anywhere with stop new ath.
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