#202431 - priceactiontds - weekly update - dax futures
Good Evening and I hope you are well.
Quote from last week:
comment: Bulls got to 18774, which was way too high for it being a pullback in a bear trend. Market is in a descending triangle where the support is 18200ish. Since we are in the middle of it, worst place to trade. Both sides have reasonable arguments for Monday but this pattern will break next week to one side or the other. Given the many upcoming earnings, I won’t predict them, nor gamble on a trade before market is showing the direction.
current market cycle: trading range - go look at the monthly chart. It’s a clear 5 month trading range. —update: 5 months now instead of 4. Will break soon.
key levels: small range 18000 / 18900
bull case: Bulls had a two legged pullback which got higher than the bears would have liked, which increased the odds of a continuation of the trading range. No side is strong enough to keep the market above or below the daily 20ema, so we are neutral af. You don’t need to analyse it further. Save your mental capacity on other markets and wait for a clear breakout.
Invalidation is below 18147.
bear case: Bears lost control on Tuesday where they allowed the market to go 200 points above the daily 20ema. They got a strong reversal from above 18700 down to 18200 but there they took profits again and the range continues. 18500 is a bad spot for everyone. Maybe strong bears will respect the minor trend line we formed and trade back down from here to retest the lows but that’s a weak argument at best. The other bear trend line around 18400 is a more reasonable expectation. If we get there, I expect bears to show strength again, just as bulls will probably buy 18200 again. Below 18200 comes 18000 and 17840 in play.
Invalidation is above 18785.
outlook last week:
→ Last Sunday we traded 18298 and now we are at 18535. High of the week was 18774 and the low was 18200. Said we get a bounce to 18500/18600 and the high was 18774. Almost perfect outlook since the downside was not as deep but we will get there in the next days/weeks.
short term: Neutral. Can see this going both ways and I don’t gamble. No bigger interest in buying this but rather waiting for weakness above 18600 to short again.
medium-long term: Time to update this section. I called for 17000 for couple of months now and I said, any short around or above 19000 is amazing. The highs held and now we will see how low we can get in 2024. 17100 is still my first bigger target and should be reached in 2024. At this point it does not make sense to call lower targets. —unchanged since 2024-07
current swing trade: Took some profits on my shorts at 18300 and would add above 18600 again.
Chart update: Added minor bear trend lines and adjusted the lower bull trend line but I don’t think market is respecting it that much. Support around 18200 and a descending triangle is more likely.
Quote from last week:
bull case: Bulls and bears alike knew the recent high at 18900 was a bad buy and they tried to save their bull case on Tuesday but once Wednesday came around and 18700ish was resistance the third time, they gave and we only produced lower highs since. Best bulls can hope for now is to keep it above 18000 and bounce at the weekly 20ema which is exactly right under Friday’s close and that the bull trend line from April will hold. Market expects a pullback and bulls want it to go above 18600, which increases the odds of this being a continuation of the triangle, rather than a new bear trend.
comment: Bulls got to 18774, which was way too high for it being a pullback in a bear trend. Market is in a descending triangle where the support is 18200ish. Since we are in the middle of it, worst place to trade. Both sides have reasonable arguments for Monday but this pattern will break next week to one side or the other. Given the many upcoming earnings, I won’t predict them, nor gamble on a trade before market is showing the direction.
current market cycle: trading range - go look at the monthly chart. It’s a clear 5 month trading range. —update: 5 months now instead of 4. Will break soon.
key levels: small range 18000 / 18900
bull case: Bulls had a two legged pullback which got higher than the bears would have liked, which increased the odds of a continuation of the trading range. No side is strong enough to keep the market above or below the daily 20ema, so we are neutral af. You don’t need to analyse it further. Save your mental capacity on other markets and wait for a clear breakout.
Invalidation is below 18147.
bear case: Bears lost control on Tuesday where they allowed the market to go 200 points above the daily 20ema. They got a strong reversal from above 18700 down to 18200 but there they took profits again and the range continues. 18500 is a bad spot for everyone. Maybe strong bears will respect the minor trend line we formed and trade back down from here to retest the lows but that’s a weak argument at best. The other bear trend line around 18400 is a more reasonable expectation. If we get there, I expect bears to show strength again, just as bulls will probably buy 18200 again. Below 18200 comes 18000 and 17840 in play.
Invalidation is above 18785.
outlook last week:
short term: Full bear mode. Will try to catch the bounces as good as one can but the big money will be made to the downside over the next months. Short term we will see a bounce that should stay below 18500/18600 and from there I expect another big leg down to 17800.
→ Last Sunday we traded 18298 and now we are at 18535. High of the week was 18774 and the low was 18200. Said we get a bounce to 18500/18600 and the high was 18774. Almost perfect outlook since the downside was not as deep but we will get there in the next days/weeks.
short term: Neutral. Can see this going both ways and I don’t gamble. No bigger interest in buying this but rather waiting for weakness above 18600 to short again.
medium-long term: Time to update this section. I called for 17000 for couple of months now and I said, any short around or above 19000 is amazing. The highs held and now we will see how low we can get in 2024. 17100 is still my first bigger target and should be reached in 2024. At this point it does not make sense to call lower targets. —unchanged since 2024-07
current swing trade: Took some profits on my shorts at 18300 and would add above 18600 again.
Chart update: Added minor bear trend lines and adjusted the lower bull trend line but I don’t think market is respecting it that much. Support around 18200 and a descending triangle is more likely.
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