Final Summary
A bullish day, despite the heavy consolidation and tight range we have been trading recently. The Dax will do whatever the Dax wants to do, all we can do is prempt the moves and follow the smart money if possible. The big question is where the major buyers would be, i.e the institutions and funds. Are they looking to hold, dump or add to positions right now. Chances are they are already long and holding, but are they looking to buy at current levels? Possibly not, as they are likely already long I would imagine they wouldn’t consider adding unless we pulled back to much lower levels first.
My mid-term outlook is still bullish for the rest of the year and I have this outlook because of the same broken record argument I’ve pitched for weeks; Oil prices are low, which means future earnings prospects are looking good. And if you add in the QE that’s being thrown about you have a nice mixture for businesses. This part of the year is reporting season, so if future earnings prospects look good, which direction will the index move. I appreciate that things don’t look so good for the Euro as a currency, but we are not discussing the Euro, we are discussing the future prospects of the leading German index and the Dax has some good performers with some strong numbers. So I am bullish, personally.
I have entered a long trade as we have broken out of the triangle formation discussed earlier, we also came back to test the triangle and it acted supportive and bounced away again.
Good morning everyone, let’s hope for a decent trading week this week. I can not make a video today, due to a failed hard drive on my laptop, so have to use an old laptop which does not have the functionality.
I’ll keep the summary short today. So we know that the Dax is trapped in a range at the moment and is awaiting a break out from it’s emerging triangle formation, in fact double triangle formation. There is increasing pressure to the downside with lots more supply than demand currently in the market place.
Consolidation trading is the name of the game to avoid being bounced around when we find fake breakouts. I might even find other markets to trade temporarily, because this one isn’t doing a great deal.
Mid/Long term bias is still bullish, current short-term bias is neutral/bearish.
The setup I have today is to only look to trade a breakout of the outside triangle and wait until it happens: (on the website)
