In this Weekly Blog, there will be just DAX LTF charts and Scheduled Events for the next week.
1. Scheduled data for the next week
Monday is last day of November, and OPEC Meetings and Eurogroup Meetings are scheduled. Asian session could be influenced by Chinese Manufacturing PMI.
Fed Chair Powell will testifies on Tuesday and Wednesday. (Due to testify on the CARES Act before the House Financial Services Committee, in Washington DC).
On Tuesday we have US ISM Manufacturing PMI, Lagarde will speak as well, and most important scheduled data this week is NFP report, on Friday.
2. Charts and thoughts
Only German DAX this time.
Starting with the bigger picture - FDAX Weekly.
Weekly close at the top edge of the Resistance area.
Going lower, on FDAX Daily chart:
More levels there, and even more on the next chart, FDAX 240 min:
Up-slopping channel and a possible bull-flag.
Let's observe all of this on the "mother"... Cash Index.
Daily chart first:
Again we can observe the overlapping ranges, and this new one represents last three days of previous week.
Going down to DAX Cash Index 240 min chart:
Levels and holes on the Cash Index.
Break above 13,300 lacked the desired "bang", a move below 13,300 as a false breakout - lacked the downside follow-trough. Both scenarios, of REAL breakout, or of FALSE breakout - carried the possibility of bigger moves. However, also came inline with Thanksgiving, so TIMING for bigger moves was not good, and due to holiday chop in low liquidity environment - we got the OVERLAPPING range formation.
As written above - I would watch that new range, especially RTH values, meaning can market make a DECISIVE move above last Friday RTH High /13,364/, OR below last Wednesday RTH Low /13,236/. Inability to do so - can lead into more ranging and consolidation, making an overlapping range. We NEED TO SEE a strong and sustained momentum to get bigger trades and better targets. Without tempo and momentum - again zone-2-zone trading. US markets -> not covered in this blog, are holding pretty well, so expect that DAX will - up to the point - follow big bro SPX.
DAX Supports: On smaller timeframes - Support 13,230; then 13,190 - breakdown below this could lead to 13k. Bigger picture - area around 13,000 is still most important support, and the only way to get bigger downside movement is on the breakdown of this reference. Then comes ~12,700 - importance of this can be seen on the first, weekly chart above... and it is also the origin of the "Pfizer vaccine news driven move".
DAX Resistances: Highs of the last three trading days are first obstacle to move above, and then comes Resistance area ~13,450-500; with the unfilled hole on Cash index, between 13,460 and 13,500. Above that - nothing much up to the ATH.
We are entering in seasonally bullish period for the markets, and make no mistake - with or without Covid19 cases, market will try to stage a "Santa Claus Rally". The question is - will THEY succeed OR fail, and important is to be ready for both, to be able to switch sides, and not argue with the market, since IT doesn't care about your bias. Remember that trading comes down to monetizing setups, and NOT predicting direction. My standard question every single day IN THIS ENVIRONMENT is: "Where can I get my 30-40-50 points on the HIGH ODD setup".
In short term trading it is very important to properly understand context heading into every day, to know from which side wind is blowing - who has the short term control, and which side will be forced to liquidate IF and WHEN market hold above or below a certain level. What is the level of volatility, what can we expect from any particular day, what market already done in premarket session, what possible setups can be available, and so on... the things that we constantly learn in the DAILY DOSE OF DAX.
Cheers, Relja a.k.a. StrayDog