2024-08-01 - priceactiontds - daily update - dax
Good Evening and I hope you are well.
comment: Yesterday I was neutral until one side clearly gains control again and boi did the bears deliver today. 600 point drop from Wednesday high and a close below 18200. This is the biggest bear bar for many months and will be part of W1/leg1 of the new bear trend. We will most likely make new lows below 17800 next week. We have a nice looking bear channel that leads to the July low, from where we can expect the W2/two legged correction to form a broader channel which we can grind down to at least 17000 over the next weeks. If bulls somehow manage to break above 18400 again, I am wrong and we continue inside the trading range which we have been in for 5 months now.
current market cycle: trading range (big triangle on the daily chart) / probably the new bear trend has started today.
key levels: 17800 - 18400
bull case: Yesterday I wrote that bulls could not get a single close above 18600 and market can test one direction/price only so much before it tries the opposite. Bulls gave up today and now we test the lows. The best bulls can hope for is to keep it above 17800 and continue inside the trading range. Given that we just had many earnings releases and the negative GDP print, I absolutely favor the bears.
Invalidation is below 17800.
bear case: Bears closed below the recent 33 bars and demonstrated strength. This selling will most likely get another leg down but now the primary goal for the bears is to keep any pullback shallow and preferably below 18300 to create two big bear gaps. Bear gap #2 will get smaller tomorrow but it should stay open, otherwise bears might fumble it again.
Invalidation is above 18300.
short term: full bear mode for 17844 or lower. There I expect a pullback to form a broader channel we will grind down over the next months. Buckle up.
medium-long term: My long term outlook stays bearish and I expect at least a -20% correction in 2024. Medium term is 17100 while I think we can touch the big bull trend line starting 2022-10 around 16700 in 2024. —unchanged
current swing trade: Had shorts from 18700 and added 18900. Took most off today and leaving a runner for 17844.
trade of the day: Short since bar 7, no ifs or buts. Bar closed below the previous 35 bars and at it’s low. Perfect signal and entry bar.
comment: Yesterday I was neutral until one side clearly gains control again and boi did the bears deliver today. 600 point drop from Wednesday high and a close below 18200. This is the biggest bear bar for many months and will be part of W1/leg1 of the new bear trend. We will most likely make new lows below 17800 next week. We have a nice looking bear channel that leads to the July low, from where we can expect the W2/two legged correction to form a broader channel which we can grind down to at least 17000 over the next weeks. If bulls somehow manage to break above 18400 again, I am wrong and we continue inside the trading range which we have been in for 5 months now.
current market cycle: trading range (big triangle on the daily chart) / probably the new bear trend has started today.
key levels: 17800 - 18400
bull case: Yesterday I wrote that bulls could not get a single close above 18600 and market can test one direction/price only so much before it tries the opposite. Bulls gave up today and now we test the lows. The best bulls can hope for is to keep it above 17800 and continue inside the trading range. Given that we just had many earnings releases and the negative GDP print, I absolutely favor the bears.
Invalidation is below 17800.
bear case: Bears closed below the recent 33 bars and demonstrated strength. This selling will most likely get another leg down but now the primary goal for the bears is to keep any pullback shallow and preferably below 18300 to create two big bear gaps. Bear gap #2 will get smaller tomorrow but it should stay open, otherwise bears might fumble it again.
Invalidation is above 18300.
short term: full bear mode for 17844 or lower. There I expect a pullback to form a broader channel we will grind down over the next months. Buckle up.
medium-long term: My long term outlook stays bearish and I expect at least a -20% correction in 2024. Medium term is 17100 while I think we can touch the big bull trend line starting 2022-10 around 16700 in 2024. —unchanged
current swing trade: Had shorts from 18700 and added 18900. Took most off today and leaving a runner for 17844.
trade of the day: Short since bar 7, no ifs or buts. Bar closed below the previous 35 bars and at it’s low. Perfect signal and entry bar.
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