Last week dominated by sellers again. Price reached long term target 11730 and 11500 extension.
Wide sell off in global indexes where US correcting from ATH on combination of tensions in US vs China and spike in yields US bonds 10/30y. EU also under sedge by escalating Italian situation where budget plan for next 3 years not only is against EU commission guide line to fight deficit but leading party threats to leave Euro and move back to Lira.
This week we have number of important events and market just cant wait for any positive news, lack of that will just extend risk reduction and sell off continue further.
Next week we will be looking for :
Buyers: trying build foothold base and push price back above 12k mark. Last 2 days action show as there is some interest at lows under 11500 and price setup higher low creating support at 11400 mark.
target: down trend line 12050/150
Sellers: have upper hand and maybe enough strength on next week news to challenge 11400 support and push price lower for one more leg.
Sellers will be also fine to take profits on last move and reload on shorts at 12050/150 and then defend down trend. So lets not treat rally as bearish trend reversing, not yet.
successful hit on that supports will open path for target at bottom of down channel which are 11k / 10.8
So far both Bavaria elections and UK/EU deal di not turn good. That can be seen as bearish news and extend sell off at spot. Last nail to this coffin can be Italian budget tomorrow.
Be extra careful!
Intraday Supports and resistances:
Long term (Daily) supports and resistances:
BEARISH DOWNTREND SUMMARY – LONG TERM
We did try to make best from sell setups since beginning of Summer and follow path to this lows. Main directional cycle and swings was based on chart below which one turn to be accurate enough and just get completed.
This chart is far from guess. Basically follow swings based on upper trend line holds and create sell opportunity, lower trend line provide support and buy entry for rally’s and breakout will occur when triangle get narrow enough.
Not bad at all if we keep in mind it took 4 months since that chart get published to completion and many good trades base on that. When most of traders was dreaming about ATH & 14.6k targets and higher we was looking at lows and 11730/500 as main target.
Chart as today:
Because DAX completed move from our trading plan now we will be moving to next, it is very early to determinate long term move. For trend reversal will take few weeks of probing lows, rally’s and dumps until new base get build strong enough to challenge bearish trend, so for that do not rush, don’t get suck in by FOMO, there will be many test of lows before proper rally.
In case we will have continuation of bearish move have look that 2 charts below, scary right? From what we see until today not as difficult or impossible to pull out by short sellers.
Best of luck and trade safe. Watch out on next week events!