DAX - Turned bearish, but it is oversold. Pop up is possible
4 Hours: Absolutely bearish. Upper support is 8950-9000
Daily: Breaks followed each other: short term uptrend at 9700, Kijun Sen at 9570, Horizontal support 9470, Kumo at 9330 and free fall. DAX had only one day correction from 9000 Key support but next day agressive selling forced it down to a major Key level, which was touched yesterday: 8500-8520. This level is extrenely important. This was the breakout point in September 2013, and after retest DAX had a massive new bullish run. On the way back down it will be a very important level when it breaks, but probably not now. Slow Stoch oversold, DMI lines very wide now and ADX reached extreme high level and Price also touched a forming wide bearish channel bottom.
To make it clear, this is not yet a trend, this is a collapse and panic shakeout so far! To be able to develope a trend, first Bulls have to get back some confidence and Bears to step back a bit. We should see some corrective move from here to 8900 - 9000 levels before next selling round. No doubt, volatility will stay high, and we will see the same sharp moves intraday regardless bearish or bullish.
Markets are always the same, people don't have memories, and their reactions are kind of possible to predict. Look, now a lot more people envision a total krach, they started to panic after the first 13 % drop from tops. Normally in cases like this they get very surprised when prices suddenly start moving up. Then they again start to question their initial view, and start believing in a recovery again. Both Bulls and Bears start to re-buy mkts. "It was good at 9000 in September, not it should be even better to buy at 8600, right?" And funny thing is that initially Price move (caused by them) will justify them. They gain some. But at the end after all volatility will kill them all and mkts will probably sharply drop in a next round.
So don't misunderstand me, it is NOT a bullish mkt. But short term it will likely pop up, at least staying in shorts from these levels has decreasing reward. If you believe in a correction, be careful, as volatility bites, so rather play with OTM Call options.
More important things: on financial mkts everything is possible! We can not exclude either a total collapse from here or that it turns back bullish again within a few months. Always stay with the trend, until it exists. Play swing trades against trend only in 1/3 or 1/2 trading unit sizes if you trade it at all. Always adjust your trading unit size according to volatility to keep the same risk. (I do it based on 20 days ATR SMA). You can check what happened to Equity indexes in July-October 2011! The only smart thing you can do is play really small.
Daily: Breaks followed each other: short term uptrend at 9700, Kijun Sen at 9570, Horizontal support 9470, Kumo at 9330 and free fall. DAX had only one day correction from 9000 Key support but next day agressive selling forced it down to a major Key level, which was touched yesterday: 8500-8520. This level is extrenely important. This was the breakout point in September 2013, and after retest DAX had a massive new bullish run. On the way back down it will be a very important level when it breaks, but probably not now. Slow Stoch oversold, DMI lines very wide now and ADX reached extreme high level and Price also touched a forming wide bearish channel bottom.
To make it clear, this is not yet a trend, this is a collapse and panic shakeout so far! To be able to develope a trend, first Bulls have to get back some confidence and Bears to step back a bit. We should see some corrective move from here to 8900 - 9000 levels before next selling round. No doubt, volatility will stay high, and we will see the same sharp moves intraday regardless bearish or bullish.
Markets are always the same, people don't have memories, and their reactions are kind of possible to predict. Look, now a lot more people envision a total krach, they started to panic after the first 13 % drop from tops. Normally in cases like this they get very surprised when prices suddenly start moving up. Then they again start to question their initial view, and start believing in a recovery again. Both Bulls and Bears start to re-buy mkts. "It was good at 9000 in September, not it should be even better to buy at 8600, right?" And funny thing is that initially Price move (caused by them) will justify them. They gain some. But at the end after all volatility will kill them all and mkts will probably sharply drop in a next round.
So don't misunderstand me, it is NOT a bullish mkt. But short term it will likely pop up, at least staying in shorts from these levels has decreasing reward. If you believe in a correction, be careful, as volatility bites, so rather play with OTM Call options.
More important things: on financial mkts everything is possible! We can not exclude either a total collapse from here or that it turns back bullish again within a few months. Always stay with the trend, until it exists. Play swing trades against trend only in 1/3 or 1/2 trading unit sizes if you trade it at all. Always adjust your trading unit size according to volatility to keep the same risk. (I do it based on 20 days ATR SMA). You can check what happened to Equity indexes in July-October 2011! The only smart thing you can do is play really small.
