What’s inside:
- Recent rise has been an unconvincing grind higher
- Important support around 10700
- Equity indices best approached with very short-term hold times on trades
The DAX has been a grind on its recent ascent as it churns through levels towards fresh 2016 highs. No real pop, indicating a surge of significant buying interest. Risk appetite, globally, has been a lot like this lately. In the U.S., for example, the S&P 500 is hanging onto key support levels, but not finding much more sponsorship than what is needed to maintain the market from declining.
Yesterday, for the second time in two days the DAX was unable to close above the August/September highs. The down-move we are seeing early today is again bringing the ‘cross-through’ trend-line (cuts through price action) off the post-Brexit lows into play along with the September/October peaks around 10700. This is the first point of support for the market to hold and reverse. A strong close above yesterday’s high at 10827 and the late December swing high (10860) will help the bulls’ case. A drop below will bring into focus the trend-line, of a differing angle, rising up from the June lows (in the ~10500s).
DAX: Daily
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For those who read frequently, we’ve said this on numerous occasions, but it’s worth repeating – keeping expectations tempered and trade durations short is serving traders best in the current trading environment. We will continue to approach the market with this mindset until we see better participation from one side of the market or the other, and a clear set-up presents itself for trade hold times beyond the 1 to 3-day time-frame.
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---Written by Paul Robinson, Market Analyst
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