The DAX started March 2018 with a drop. After the sharp downwards movement in February 2018 and subsequent weak recovery, it was only a matter of time before the next sharp drop. The question now is how far we will go and over which period of time. On Friday we saw the DAX bouncing off the mid-year lows. This is, of course, a support line. Further down, we have the 2017 lows around the 11400 level, offering another level of support. Should both support lines let the DAX through, it will probably lose momentum around the 11000 level - on one side as it is a psychologically important round number, but also because it would have completed a drop as deep as the one in Febraury. I give it until mid March to reach its low. After that, I am almost certain that we will be at the start of a new bullish trend.
I expect a small bounce off the 11875 to maybe 12000 or at most 12250. This is a good place to jump in for the short.
Suggested trade:
PUT-Option on the DAX - wait for over 12000 to jump in, 12200 would be ideal
SL: 12450
TP: 11450 (75%) and 11050 (25%)
Good luck.
I expect a small bounce off the 11875 to maybe 12000 or at most 12250. This is a good place to jump in for the short.
Suggested trade:
PUT-Option on the DAX - wait for over 12000 to jump in, 12200 would be ideal
SL: 12450
TP: 11450 (75%) and 11050 (25%)
Good luck.
Comment:
Sorry, small mistake: "I expect a small bounch off the 11875 to maybe 12200", not 12000.
Comment:
The above is purely technical. Keep an eye out on the news. On Sunday we expect the SPD voting results regarding the German coalition government. Trumps trade war will probably also yield important results in the next fews days.
Comment:
UPDATE: SPD voted yes for the coalition. I don't think this came as a surprise to anybody and therefore, the effect on the DAX will be minimal. Hopefully it is enough to allow a small bounce off the support on Monday and give us the short opportunity we are waiting for.
Comment:
So far so good. A few late sellers and panicked Peters kept the DAX low at the opening today, but we are well on our way to 12200. After that, you got two options:
1. Be a smart trader, wait for a clear bear sign (possibly drop below the 1850 line) and short.
2. Be a capitalist pig and short at 12200. This way is more risk, which I try to minimize with a narrow stop loss (12450) and time limit (in case there is no price drop until wednesday night, I am out).
Of course, I could be wrong entirely, so always remember to use your own head. Whatever you do, good luck!
1. Be a smart trader, wait for a clear bear sign (possibly drop below the 1850 line) and short.
2. Be a capitalist pig and short at 12200. This way is more risk, which I try to minimize with a narrow stop loss (12450) and time limit (in case there is no price drop until wednesday night, I am out).
Of course, I could be wrong entirely, so always remember to use your own head. Whatever you do, good luck!
Trade active:
Ok, its a little below target, but I have started shorting. Will add more to my position as the price moves to 12200. Stop loss is 12450.
Trade closed manually:
Todays bounce off the 12000 line and inability of the DAX to reach the 11875 level is a bad sign for us. Although I do not expect a significant uptrend in the next 8-9 days, it seems unlikely that we will be reaching new lows. I closed a few position earlier today as we bounced and will be closing the rest before market close today. Luckily the entry and exit points are about the same so I expect to have a minimal loss.
Comment:
with DAX under 12200 now we can all break even, maybe even pick up a small win.