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Mini Charting Blog, Dec 5, 2021

Public part - Daily charts and comments on SPX, NDX, RUT, DAX

Volatile week behind us, with many moves in the premarket session, and in the afterhours (for DAX traders). Omicron, Powell, tapering, inflation, blah, blah... and YET - those moves were also technical moves, and part of the technical correction.


US markets: Selloff on Friday, and in the bigger picture - SPX is still at DMA50, and NDX made a bounce from it as well. The difference there is that SPX actually respects DMA50, and have made MANY bounces from it, while on NDX, this MA can be used only as a gauge of trend strength.



Check the SIZE of the rotations on both, to get the idea of how big they can be, percent wise.

The bounce on BOTH was also a HALFBACK of the swing up move, from Oct 4th. Now, HALFBACK and reactions from it, is something that we can often see on NDX, and on different timeframes as well.

Pullback before the "Santa Rally" is common thing, and seems that many people do not understand, is that mentioned period is at the very end of the year, in the last week of December through the first two trading days in January.

Is Santa Rally something that is given, something that simply MUST HAPPEN every single year?

- No.

But we are entering into the seasonally bullish period for the stock markets, and now is the time to gauge this pullback and see can it turn into something more serious or not.

And while SPX and NDX made bounces from HALFBACK of the swing move - ugly cousin from the village that nobody calls on parties - Small Cap Index Russell 2000, made an false breakout of the 9-month consolidation, and went RIGHT BACK INTO IT. Nothing bullish there.


Below DMA200, and went all the way down to the lower edge of the range.

Is this familiar to you? It should be.

"When price makes a false breakout out of the range, and then comes back into it, we get the setup, which targets HALF of the range, and OPPOSITE SIDE of it."

Something to watch: is it going to bounce there, or go down from the range.

Another weaker Index is of course German DAX.


From October lows, almost complete reversal was made. Also - below DMA200.

Cash and Futures on DAILY (screenshot from Setups Gallery)

Entire last week, DMA200 and resistance area there stopped every attempt to move higher.

No recovery is below DMA200, it is as simple as that.

That Daily candle on Futures, from Friday Nov 26th is still the dominant candle, and just check where the HALFBACK of that one is, in your own time.

Where next?

Can it be to the downside, can it be to the upside?

There are plenty of references in the charts that are above, to find the INVALIDATION POINTS for each of the scenarios.

IF US markets make a same move like DAX - THEN check where October lows are.

IF DAX moves below weekly low, THEN at least 14,800 will come, and below it - check the chart given here: ~14,400 / 14,200.

On the upside, IF US markets HOLD the HALFBACK and start the recovery, then for DAX recovery starts once it clear DMA200 and make the Support out of it.

As a day-trader, I LOVE this recent moves, because these down moves brings volatility and opportunities, and for short-term traders - we must concentrate on monetizing setups, NOT predicting the direction.

For Subscribers

RECAP for Friday, Dec 3 2021 and some observations for trading the volatile markets

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