Dax & Dow

[Bell]

This is beginning to look ominous across the indices. US poor open and DAX below12k.

Don't want to see a break below 25k.

Love my longs.

Was praying for calms for just a couple of months.  Don't look that way.

Also summer volumes may dry up so moves will be more pronounced.

[Caseynotes]

Dow attempting to break back up through the daily chart support level (25555) broken this morning.

[Caseynotes]

Dow open drive down to S3, markets have been pricing in the realisation there will be no resolution to the trade war any time soon and likely to get worse before it gets better.

[Guest Turnip230248]

Casey beat me to it. Dow doesn't oblige with such one way trips from the off everyday. 🙂 

 

[Bell]

This is somewhat annoying could we have some calm for 6 months, please.

Would like to enjoy my longs... actually desperate too.

Have a horrible feeling we are looking at a 21750 retest.

24500 first support in my view if we break below.

Looking at a bounce then a gap below 200 dma. Thoughts guys?

[Caseynotes]

Looks like 25214 might get retested but it's a strong level with multiple confirmations, 21750 is still a long way off and a number of support levels before then.

 

[WallStFoxy]

@Bell

So long as 11800 holds firm we may see a rally on the Dax. 

[Bell]

A lot has to happen with the Dow just that the chart looks horrible. Especially the MACD.

On both the bounces will speak volumes.

Foxy's line at 11800 looks pivotal. Does not feel like there is a lot of oomph in European markets.

They could take the biggest hit from the trade war.

[Caseynotes]

Both dax and dow have traveled back up to check the pivot and look to be trying an early break upward. The dow's open drive down yesterday on trade war concerns was compounded by lower than expected US PMI data later in the afternoon. Today will either see a retest of the lows or an attempt to bounce back up on thinking the sell off was overdone. 

[WallStFoxy]

9 hours ago, Bell said:

A lot has to happen with the Dow just that the chart looks horrible. Especially the MACD.

On both the bounces will speak volumes.

Foxy's line at 11800 looks pivotal. Does not feel like there is a lot of oomph in European markets.

They could take the biggest hit from the trade war.

@Bell

Either way, The DAX looks good to me a drop below 11800 should open a trap door and deliver some great shorts but if for some reason we get a bounce 12500 looks good on the long side, sounds like a win-win from here.

Edited May 24, 2019 by Foxy
wrong tag

[Mercury]

Appreciate the erroneous tag @Foxy but as I have now accessed this thread I thought I would add my 2cents worth FWIW.  To be clear, I do not trade the Dax but I do monitor it for congruence/divergence vs other indices.

I am currently of the mindset that the Dax was the first of my indices to top out, way back in Jan 2018 and looks to have posted a Head & Shoulders formation with an associated iceline zone between 11,700-900.  Stochastic and RSI are over bought, typical of a wave 2 end but there are 3 possible scenarios still in play as follows:

1. Wave 2 (purple) not yet completed, will travel up to Fib67/78% and retest the medium term trendline that was broken back in Oct 8 when the US large Caps turned down sharply.
2. Wave 2 Purple is already in (see Daily chart) and a smaller EWT 1-2 is also done and now the market will drop from here.  A break through the iceline would confirm this.
3. The Dax will join the US large caps with a fresh ATH, negating the H&S (SP500 & Nasdaq at least, Dow is not there).  The price action from the Jan 18 top could be seen more as an A-B-C retrace (red labels), which supports a strong final rally to a fresh ATH, likely at or near the upper very long term resistance trendline.

Looking at the Daily chart there is a strong pair of parallel channel lines, however Momentum is still is very strong negative divergence territory, will take something to reverse this and we haven't yet had a drop sufficient to reset.  If scenario 2 is correct then I would anticipate a swift drop through the lower channel line that never looks back (or maybe a short term retest) as this would be a wave 3.  So for me the lower channel line break is the key trigger (not withstanding the dreaded fakeout!) followed by a break of the iceline support zone.

 

[Caseynotes]

After the check at the pivot dax moved on to tag R1, currently back to join dow mid way between pivot and R1 awaiting the US market open.

May be a tame Friday afternoon and into US market close as it's a public holiday in the US on Monday as well as UK.

[Bell]

Great notes guys. This a really interesting thread.

Of the couple of Dax trades that I have done. I do think it a worthwhile index to trade.

The 11400 zone is my first main target where Merc highlighted the gap on the chart.

This next 6 months could see outsize moves now we will have more Brexit uncertainty and trade war moves.

Under the hood Global capital seems to tighten even though we have Fed easing.

There is more debt to sell - interesting to see when the rubber really hits the road.

Casey looked at the sentiment a couple of weeks back and suggested too many were short orientated.

I agreed then. Does feel now that sands are shifting beneath. But the short side is always there...

 

[Caseynotes]

Good point, I've not looked for a while and the shorts are way down from where they were, you would of thought the last 4 weeks would have encouraged them to hold, but then that's why it can be read as a contrarian indicator.

Edited May 24, 2019 by Caseynotes

[Caseynotes]

Watch the volume on the US indices, it'll start to die when US traders pack up early and head home for the long weekend 🙂

[WallStFoxy]

@Mercury

That's a very elaborate way to say, you agree with me. Your Elliot waves always look very cool and as ever great charts.

Edited May 24, 2019 by Foxy
forgot tag

[Caseynotes]

After a check of the pivot price went for a test of R1 now returning to the pivot, not much enthusiasm, just noted there is a French, Swiss and German bank holiday on Thursday, what is wrong with these people?

[Caseynotes]

Dax and Dow have already checked the pivot and are moving up though the S&Rs will be somewhat shortened following small volume over Sunday and Monday. But an early check of the pivot and a steady directional move is usually a good sign of further continuation. Dow currently checking resistance while Dax watches closely just before the 7am Euro market open.

M30 charts;

 

[Caseynotes]

Dax hoping for support off S1 but Dow still not settled, Has S1 and the weekly chart support level immediately below and looks determined to test it.

M30 charts; 

[WallStFoxy]

Heads up we have just bounced off the long term Bull channel at 11880 a rally from here could be big so 11880 could be Pivotal.

 

[Caseynotes]

Dax has close eyes on Dow and it's battle over it's weekly support level and is putting in almost identical candles.

[Guest backwardation]

Just a thought for all the bears:

Trump strongly believes the economy (in his mind that's the stock market) is his biggest success metric, and is KEY to his re-election.

Edited May 29, 2019 by backwardation

[Caseynotes]

Dax easing lower but dow still hanging onto support but only just, S&P resting on the March low. Something of a battle in slow motion going on as seen in the long tails top and bottom on both the dax and dow.

[WallStFoxy]

Dax Support is at 11855 and could be a double bottom. Lets wait and see!!!

[WallStFoxy]

24 minutes ago, Foxy said:

Dax Support is at 11855 and could be a double bottom. Lets wait and see!!!

So not a double bottom then!!

[WallStFoxy]

Ha a drop to 11850 and then bounce may be a stop hunt!!

[WallStFoxy]

Dji looks pretty close to the bottom of its channel.

 

[Caseynotes]

Dow having problems pushing back up though S1 may cause dax to pause after bouncing up off 11850;

[Caseynotes]

M30 dax and dow in similar shape to the S&P, hanging around to pivot waiting for the off. If the direction is up dow may have difficulty crossing the red weekly chart broken support level which will cause dax to pause if it's following. If the direction is down to retest the recent low (now S1) will be interesting to see if price powers through or stalls.

[Caseynotes]

Gold down, oil up and dow up, markets looking to turn away from risk off to risk on;