DAX Weekly and Daily Chart
Edit: updated version (July 13) is posted here – Charts and Updates
Let’s start with the Weekly Chart (left side):
Price reached the upper resistance area 13k, bounced off and is now trending down since mid June finding support at 12.450, the previous high of Q1 2015.
The RSI showed Bearish Divergence compared to the previous high of Q1 2015 and it broke the long term uptrend.
The MACD produced a Bearish Crossing during the 2nd week of June.
So based on the Weekly Chart, I still favor short positions as long as the DAX is not able to close > 12.700 (red short term weekly trendline).
A dip into the 11.800 – 12.000 area could be a new opportunity to buy the flight to private assets.
The Daily Chart shows Price breaking through the trendline that started Q1 2017, retesting this trend, but failed, new retest is currently in progress, but not able to close back inside the green trend channel (yet). A failure to close inside the previous trend channel, often signals a continuation of the previous trend…in this case down to 11.900 assuming the energy of the 1st arrow matches the energy of the 2nd arrow.
Secondly, the Daily RSI is trending down, while Price trends up = Bearish Divergence…adding more fuel to a continuation of the short term downtrend.
The positive for bulls is that the CW indicator, excellent for spotting short term market lows, is signaling that the likelihood for a low to be formed is near.
First, let’s see how the DAX behaves near 12.450 (current levels, support weekly chart) and the 12.600 (retest area, green trend channel daily chart) before betting the farm, long or short.
Personally, I prefer one more short term up move to the 12.600-700 area, an opportunity to add short positions for a drop into 11.900. I will adjust my strategy and positions if the circumstances require. For example, if there’s no retest of 12.600-700, then I will likely add short positions < low of last week 12.300. A break above 12.7k-13k indicates higher highs and short term short positions become invalid.
Last, but certainly not least, there are several cycle time windows planned for the short term, click here to find out when the market (S&P500) is likely to change the short and medium term trend.
Click here to see my Total portfolio and how I’m invested in stocks, bonds, cryptocurrencies and precious metals.
Summed up based on the Weekly Chart:
< 12.300 SHORT (again)
< 12.700 Neutral / Overweight short
>12.700 Neutral / Overweight long
> 13.000 LONG
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