#202429 - priceactiontds - weekly update - dax
Good Evening and I hope you are well.
Quote from last week:
comment: Big down, bigger up. Again. High was high enough to qualify as another double top but the high also undershot the bull wedge resistance line. Bulls have not been able to print more then 3 consecutive bull bars since May. Why would they now? Bulls bought dips and I doubt they want to buy above 18800 all of a sudden. Odds favor the bears to trade to the bull channel support around 18500 over the next 1-2 days.
current market cycle: trading range - go look at the monthly chart. It’s a clear 4 month trading range. —unchanged
key levels: small range 18500 / 18900
bull case:
Above is from last Sunday and still valid. As long as bulls trade above the daily 20ema and inside the bull channel/exp triangle/wedge (yes all apply), it’s bullish. Problem with the bull case is, do you really want to buy above 18800? Market knows only rejections above this price so no matter how you put it, new longs here are bad. Can you buy intraday dips at support for scalps? Absolutely.
Invalidation is below 18360.
bear case: Bears are at the exact same spot as last Sunday but just a tat higher. They want a big reversal again at multiple resistance above 18800. They also see all the rejections from the past months at this level and shorting here has been very profitable. They also know it’s a bad buy for the bulls up here. Odds clearly favor them to trade back to at least 18600 but we will probably see 18500 early next week.
Invalidation is above 18900. Market was rejected twice here on Friday and reversed. Bears do not want to see the market testing that price again or they will probably give up.
outlook last week:
→ Last Sunday we traded 18666 and now we are at 18857. High of the week was 18927 and the low was 18362. Outlook was ok. I said we test back down and we did even 100 points lower than I thought. Also said bulls were in control above all ema. I absolutely did not think bulls can do 18900+ again but here we are.
short term: Bearish at least to 18500. It’s 50/50 if bulls can do a higher high or will only print lower highs from here so I’m not into guessing. Looking for early weakness and then at 18500 absolutely neutral and let the market decide where it wants to go next. Any bad Dax earnings next week will probably flush it below 18500 again.
medium-long term: 17000 over the next 3-6 Months and when we get there, I update again. —unchanged
current swing trade: Short since 18700, added to shorts 18900. Will hold this till Cathy closes ARKK or the big short 2.0 is announced.
Chart update: Nope.
Quote from last week:
comment: We got the breakout to the upside, then the downside and another upside breakout again. Clearly not the continuation of a strong bull trend but a leg inside the trading range. Friday’s bull bar is a bad buy going into next week, which raises the odds of market moving sideways to down. Two bull wedges on the daily chart and I slightly favor the bears to break to the downside at least to the daily ema 18460. Weekly tf gives head & shoulders vibe but as long as market is staying above the weekly 20ema at 18200, it’s neutral inside the given key level.
comment: Big down, bigger up. Again. High was high enough to qualify as another double top but the high also undershot the bull wedge resistance line. Bulls have not been able to print more then 3 consecutive bull bars since May. Why would they now? Bulls bought dips and I doubt they want to buy above 18800 all of a sudden. Odds favor the bears to trade to the bull channel support around 18500 over the next 1-2 days.
current market cycle: trading range - go look at the monthly chart. It’s a clear 4 month trading range. —unchanged
key levels: small range 18500 / 18900
bull case:
Bulls want to stay inside the bull wedges and break above them to retest the ath 19006. They are making higher highs and higher lows and are above all important ema.
Above is from last Sunday and still valid. As long as bulls trade above the daily 20ema and inside the bull channel/exp triangle/wedge (yes all apply), it’s bullish. Problem with the bull case is, do you really want to buy above 18800? Market knows only rejections above this price so no matter how you put it, new longs here are bad. Can you buy intraday dips at support for scalps? Absolutely.
Invalidation is below 18360.
bear case: Bears are at the exact same spot as last Sunday but just a tat higher. They want a big reversal again at multiple resistance above 18800. They also see all the rejections from the past months at this level and shorting here has been very profitable. They also know it’s a bad buy for the bulls up here. Odds clearly favor them to trade back to at least 18600 but we will probably see 18500 early next week.
Invalidation is above 18900. Market was rejected twice here on Friday and reversed. Bears do not want to see the market testing that price again or they will probably give up.
outlook last week:
short term: Neutral. Higher highs, lower lows. Expanding triangle, form of trading range. 50% pb is 18439 and if bulls do not rally strongly on Monday, I will look for weakness and a pullback to 18450 or lower.
→ Last Sunday we traded 18666 and now we are at 18857. High of the week was 18927 and the low was 18362. Outlook was ok. I said we test back down and we did even 100 points lower than I thought. Also said bulls were in control above all ema. I absolutely did not think bulls can do 18900+ again but here we are.
short term: Bearish at least to 18500. It’s 50/50 if bulls can do a higher high or will only print lower highs from here so I’m not into guessing. Looking for early weakness and then at 18500 absolutely neutral and let the market decide where it wants to go next. Any bad Dax earnings next week will probably flush it below 18500 again.
medium-long term: 17000 over the next 3-6 Months and when we get there, I update again. —unchanged
current swing trade: Short since 18700, added to shorts 18900. Will hold this till Cathy closes ARKK or the big short 2.0 is announced.
Chart update: Nope.
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