DAX

[Kodiak]

DAX Weekly and Daily

Correction time?

Enough is Enough?

[Mercury]

At the risk of precipitating another condescending lecture about how we shouldn't look for turns and how there is only ONE way to trade @Kodiak let me say I agree with you that a turn on the Dax is on the cards.  The Fib 88% is lurking just above current price so a jump to that level is possible to complete a large time frame wave 2 retrace.  There is always the possibility of a double top on the Dax and we cannot yet discount a break through to another ATH but this would be the first non US large cap market to do so...

You have to ask what is driving the Dax though.  Unlike the US, where there is much debate about when we will see a recession or how strong the economy actual is (not very of you look at the data trends with a balanced view rather than a perma bull bias) or if it will only be another manufacturing recession a la 2015/6, Germany is in recession.  The only answer can be that the ECB keep churning out the **** and the Dax addicst keeps lapping it up and perhaps more pertinently the other World indices are being propped up by the US large caps.  So for a turn to happen we probably need to see one on US large caps too.

That said there is no reason why the European indices can't make a move before the US markets open.

We could see a fast move up on the Dax to test that Fib 88% before a drop or a drop from where we are.  Whichever happens, for me we have two scenarios that would play out as a result (excluding a breakout)as follows:

1. This top is the wave 2 turn and the next move would be a 1 down, 2 up to produce a lower high
2. This turn is not yet the top of this move and we see a final rally (maybe the famous Santa rally) to close out the move and begin the Great Bear.

Issue for me is that until I see the US large caps top out I would not be confident of any other market topping.  And therein lies the main problem with the bearish set up, there isn't one triggered yet, they are all still in progress.  So my approach is to watch and wait for the triggers across all the main indices.  Can't comment on your Williams indicator as I don't use it but we do have negative momentum divergence building on most time frames, low volume and the Vix is shaping to breakout to the upside so while there isn't a specific trigger for me for a Short yet the case is gathering.

 

[dmedin]

IMHO the only oscillator that has any usefulness is the RSI, all the others are far too noisy and generate more false signals than useful ones.  😋

[Mercury]

Might not even have to wait for US opening today...

[dmedin]

@Mercury Have you started using IG's web platform charts?

 

[Mercury]

Only for the Vix.

[dmedin]

Your hourly chart for S&P 500 does look like a correction is coming, not necessarily a huge drop though.

[Caseynotes]

12 minutes ago, dmedin said:

Your hourly chart for S&P 500 does look like a correction is coming, not necessarily a huge drop though.

hmm yes a bull flag, very bearish ... or try looking at other S&P H1 charts, ... see the difference?

[dmedin]

Personally ... I don't look at hour charts any more.  Daily and weekly, mainly.

[Mercury]

[dmedin]

😄

[Mercury]

Possible small scale 1H chart megaphone formation that could signal a reversal.  Also top out signs on all US large caps plus Nasdaq just broke below the recent low on opening.  Not conclusive until there is a close below but worth watching.  NMD at the top (all markets actually) and turn just below that Fib 88% I was tracking.  Add to that the Russell 2000 has punched lower on decent volume and the Vix looks like it is setting up for a rally...

 

[dmedin]

Here it comes.  Hunker down, button (batten?) down the hatches, drown your miseries, and slit your wrists.  😿

[dmedin]