Like many indices, the DAX has enjoyed a strong start to the year after a dismal ‘Santa’s rally’. But after a 9% rally this month and early signs of a potential top, perhaps it is time for the DAX to pull back from its highs.
If we look at the daily chart, the market formed a small top and daily close below 15,000. Whilst prices are back above the milestone level, upside volatility is lacking and there are now the early signs of a lower high with yesterday’s bearish outside day. Perhaps we have seen the end of a wave b, which is part of a 3-wave countertrend move.
• Futures markets point to a soft open for the cash market today
• The bias is bearish below 15,200 / yesterday’s high
• A 100% projection / wave equality is around 14,800 and 20-day EMA, making it a viable target for bears
• A break below 14,800 brings 14,700 / December high into focus
If we look at the daily chart, the market formed a small top and daily close below 15,000. Whilst prices are back above the milestone level, upside volatility is lacking and there are now the early signs of a lower high with yesterday’s bearish outside day. Perhaps we have seen the end of a wave b, which is part of a 3-wave countertrend move.
• Futures markets point to a soft open for the cash market today
• The bias is bearish below 15,200 / yesterday’s high
• A 100% projection / wave equality is around 14,800 and 20-day EMA, making it a viable target for bears
• A break below 14,800 brings 14,700 / December high into focus
