Germany
SHORT DAXWhat I am looking for is the market to continue getting rejected from the 2 red zones. This has happened on multiple occasions and if the market continues to fail to break above these zones then we want to be looking for shorting opportunities.
Trade is to short the market below the 10,527 level which is the orange dotted line.
Target for the trade will be the 10,200 level as a main target, however I will be taking profit at more immediate levels 30, 60, 90, 120, 160, 200, 250 points and then the 10,200 level which would be around 320 or so points.
Stop loss for this trade is going to be 10,635 on the short below 10,527
Short book: Dax - Down from ECB key level, next: 10257,9745,9226Today we added a couple shorts, I'm posting the trades we currently have open but not providing entry/stop suggestions. Only trade them if you have a trading strategy, or, ask me if you're interested in learning more about the one we use (Tim West's 'Key Hidden Levels' and 'Time at mode').
We have some worrying bearish signals, so it's a good idea to have a market neutral position, picking stocks to short, while still looking for longs in undervalued companies.
See related ideas for the rest of the trades we took. You may still be able to join them or wait for a secondary entry when/if we decide to add to them.
Good luck,
Ivan Labrie.
German 10-yr Bunds at key support, bullish divergence on intradaGerman 10-yr Bund prices dropped to rising trend line support coming from June low and July low.
Prices are attempting a rebound form the rising trend line support and the odds of a solid rebound are high, if we take into consideration the bullish price RSI divergence on the hourly and 4-hr chart. Even the MACD is suggesting the bearish momentum has run out of steam.
Possible rebound in Bund (drop in yields) suggests we may be in for a more pronounced bout of risk aversion in the financial markets.
Germany: 43 cent per share risk shortThis is a very, very tight stop loss short setup in the monthly EWG chart. If it confirms (which it might, due to the Deutsche Bank impending collapse), we could get confirmation during October.
We'd need price to stay clear from the 26.10 mark for the whole month, so we could use a stop at 26.11 without a problem here, or just trade it with options instead and exit if 26.11 is breached.
Interestingly enough, the SPX chart has a big uptrend that confirms if during October, we don't retest 2100, so, maybe we have a huge pair trade there: one fires an uptrend, the other a downtrend?
That would be a tremendous trade...
Good luck, hopefully they sort this DB problem without triggering a systemic crash, and if they do, we will be prepared.
Ivan Labrie.
Deutsche Bank – Series of horrors, no reversal signal on chartsDeutsche Bank is smashed from all sides. The bank has gone from being Europe’s best in 1980s to being the worst in 2016.
What went wrong?
Check out Panmure Gordon’s Senior Market Commentator David Buik detail Deutsche Bank’s journey from Best to Worst - www.youtube.com
Don’t trust the rebound
Shares are up more than 3% at 10.85 levels. This is because the bank denied capitalization problems and has decided to sell its insurance unit Abbey Assurance. However, not that official denial is always confirmation… don’t trust anything unless it is officially denied.
Technical outlook
There are no major signs of reversal – No bullish price RSI divergence on hourly or 4-hr or daily chart. Neither do we have candlestick patterns that suggest reversal.
Infact yesterday’s candle was a spinning top of sorts…though it appears in a corrective and cannot be called as a top… still it suggests indecision.
In the short-run bearish invalidation is seen only if prices see a daily close above 11.13 (Sep 21 high).
Till then there is little hope for bulls… bears can expect fresh sell-off below yesterday’s low of 10.65.
DAX – Confluence of 100-MA & Pivot support stands exposedThe inside day candle stick formation on Friday followed by a gap down opening and a big sell-off yesterday suggests the retreat from the high of 10,780 (Sep 8 high) has resumed and the index is likely to test 10, 182 levels (100-DMA + monthly pivot support).
Only a daily close above 10,705 (Sep 22 high) would signal bearish invalidation.
QQQ/EWG: Merkel gave us green light, short Germany and long QQQThis potentially a very rewarding pair trade. You can enter shorts in Dax (either via CFDs or using the EWG etf) and longs in Nasdaq composite (CFDs or via the QQQ etf), risking 1 time the monthly average true range (but using no stop - the idea is merely to size the trade based on volatility).
This is potentially a long term trade, and a good way of gaining short exposure based on fundamentals without being solely short Deutsche Bank or Germany.
Good luck,
Ivan Labrie.