Dax

[firewalker99]

...I know it isn't my thread and there may be better locations to make the point (apologies to the thread originator for that)...

Yes there are. May I suggest the T2W feedback forum so we can please continue this thread as we did before. Fortunately we still have the Daily Dax thread, so let's not try too ruin that too okay?

 

[firewalker99]

Hello, FW.

What's your take on the Dax?

:?:

You can review my latest post in the Daily Dax thread for that.
I'm looking to short on Monday if we break below 6550 (futures price). We also have lot's of (important) figures next week (intrest rate statement amongst others) where I most likely will be looking to fade the market's initial reaction.

So, what's your take and how long have you been trading DAX? Are you primarily a swing trader, intraday trader,...?

 

[firewalker99]

Another effort (in vain most likely)

This is a yearly view of the DAX. As always, any future projections are welcome (but unlikely to be seen)

 

[Lightning McQueen]

This is a yearly view of the DAX. As always, any future projections are welcome (but unlikely to be seen)

Hi FW

Hows it going mate, hope you accept my feeble effort, its a bit rushed and im not into forecasting. sorry chaps for interrupting a jolly good flan fling but its not often peeps are posting this late and I thought i'd have a go anyways.

Im a good flan dodger so fire away :cheesy:

 

[firewalker99]

Hi FW

Hows it going mate, hope you accept my feeble effort, its a bit rushed and im not into forecasting. sorry chaps for interrupting a jolly good flan fling but its not often peeps are posting this late and I thought i'd have a go anyways.

Im a good flan dodger so fire away :cheesy:

Thanks Lightning McQueen, you are very brave to do this, especially in the light of some of the posters last night, who hide between questions or insults.

I'm not into forecasting myself, I only try to visualize different scenarios before they materialize. For tomorrow for example, if price travels down to 6500 the reaction that level will be important to see if it holds any support. I'm also assuming that's the reason you put a green bar on your chart.

As for the building up to 7050, on this chart it's more clearly visible: even without volume you can see that the volatility and the daily range was getting smaller. Each break higher was losing energy, the first move higher took us from 6300 to 6600 (300pts) in 6 or 7 consecutive updays. The next break went from 6700-6900 (200pts) in about the same number of days. The last push up lasted only two days and went from 6900-7000 (100pts).

I'm not saying I could have predicted the exact moment for the trendline to break, but either way we were either in need of a buying exhaustion or a swift downmove after we failed to get any higher than 7050 (50 points higher than last upmove).

Anybody who has anything constructive to add, is welcome to do so.

PS: I'm trying to put this thread back on rails (for 4rd or 5ft time), so I would appreciate it if this time the disruptions were left to reside elsewhere (if you really feel the need to unload your frustrations you may always PM me, but don't expect any reaction).

 

[Lightning McQueen]

I'm not into forecasting myself, I only try to visualize different scenarios before they materialize. For tomorrow for example, if price travels down to 6500 the reaction that level will be important to see if it holds any support. I'm also assuming that's the reason you put a green bar on your chart.

Hi FW

Thanks for your comments

I like the idea of the visualising different scenarios bit, I cant do that too well yet, I have to rely on seeing where the price is in relation to the MA lines at the time, nor am I clever enough yet to write an in depth analysis as you and others are good at.

My thoughts on 6500 would be that there is strong support here, its a nice round number for starters, then because the price is up in the clouds, there's no real support areas until 6500,
the red MA line appears to have offered some token resistance in the US, this was broken friday and headed for the yellow line.

Interesting that the US market was falling while europe was rising, albeit only slightly before the big move down on the 27th.

I will post a dow piccy for comparison (well if Splitlink can, so can I )

 

[barjon]

deleted all recent off-topic posts - please concentrate on the topic and not each other.

jon

 

[firewalker99]

Hi FW

Thanks for your comments

I like the idea of the visualising different scenarios bit, I cant do that too well yet, I have to rely on seeing where the price is in relation to the MA lines at the time, nor am I clever enough yet to write an in depth analysis as you and others are good at.

My thoughts on 6500 would be that there is strong support here, its a nice round number for starters, then because the price is up in the clouds, there's no real support areas until 6500,
the red MA line appears to have offered some token resistance in the US, this was broken friday and headed for the yellow line.

Interesting that the US market was falling while europe was rising, albeit only slightly before the big move down on the 27th.

I will post a dow piccy for comparison (well if Splitlink can, so can I )

Your comment about US markets reaction not in sync to DAX as before is a very astute observation. We (myself and some other dax traders who are not afraid to put on realtime trades), noticed about the same in the days leading up to the big plunge. At that time if felt like as DAX was tyring to keep it's head above water, while knowing it was going to be pulled down later on.

Also, I agree that there's no real support below this, but that doesn't mean price has to fall straight away. Friday's close though doesn't mean much good. If you compare it to the close the week before you still had some strength, which hinted at a possible strong opening on Monday (which led DAX to travel right to 7050).

Although there wasn't such a clear view of a buying climax on DAX, I believe there was a clear signal on the CAC40 the same day. Now I realize there are not much CAC40 traders out here, but it was nevertheless a warning sign. The amount of demand put into a single bar caused a vacuum on the supply side. Anyway, just a sideways remark about how I think it's important to keep an eye on correlated markets. But as this thread is about DAX I'll let you continue, you were doing just fine

 

[Pat494]

Your comment about US markets reaction not in sync to DAX as before is a very astute observation. We (myself and some other dax traders who are not afraid to put on realtime trades), noticed about the same in the days leading up to the big plunge. At that time if felt like as DAX was tyring to keep it's head above water, while knowing it was going to be pulled down later on.

Also, I agree that there's no real support below this, but that doesn't mean price has to fall straight away. Friday's close though doesn't mean much good. If you compare it to the close the week before you still had some strength, which hinted at a possible strong opening on Monday (which led DAX to travel right to 7050).

Although there wasn't such a clear view of a buying climax on DAX, I believe there was a clear signal on the CAC40 the same day. Now I realize there are not much CAC40 traders out here, but it was nevertheless a warning sign. The amount of demand put into a single bar caused a vacuum on the supply side. Anyway, just a sideways remark about how I think it's important to keep an eye on correlated markets. But as this thread is about DAX I'll let you continue, you were doing just fine

Not much strength on Friday's close imho
Perhaps you see a a negative opening tomorrow ???

 

[mickandpete]

If you think this is hairy wait for the rest
IF this is REAL.... this is only day ONE !!!

DAX FTSE DOW all down.
WHY?
China falls 10%
Market commentators all agree.This is GOOD for the market(yeah right) Nothing to worry about. Fundamentals still in place for growth.
CRASH?? No way they say drawing upon comparisons with the past.
This is not the past it is now.
There is one glaring fundamental that they all conveniently overlook.
The Jap Yen. It is hugely undervalued. It has been used as a source of financing for vast borrowings to purchase WORLD WIDE assets at minimal costs.
Now what appeared a no lose situation has become wobbly.
Where do we go from here? The past cant tell you. This scenario is new and unprecidented.
The worm has begun to turn.
Look east young man,that fortells the future, the YEN is the key.

 

[grantx]

Mick,

Re undervalued yen.

But the Japanese have not been criticised by the US government for maintaining a weak currency (compare the Chinese). Why? Probably because the Japanese are one of the (if not ‘the’) largest buyers of US treasuries, ie the principle financiers of the US deficit.

Isn’t this just another (monumental) example of a carry-trade – borrow yen, buy US?

Grant.

 

[RedDuke]

Chinese are actually the largest buyer of US securities, they now hold over 1 trillion. Japanese hold around 800 billions.

 

[mickandpete]

Grant
The US Government,in fact the whole nation consider all foreigners to be working against their interests.
Here again the worm appears to have turned.I read recently that a line has been crossed and foreigners now earn more from their US assets than the US does from its foreign holdings. (Correction or positive data welcome )
As for the idea that everything in the US garden is rosy,the ripples from the Sub Prime mortgage market are deepening.

 

[hobby]

DAX FTSE DOW all down.
WHY?
China falls 10%
Market commentators all agree.This is GOOD for the market(yeah right) Nothing to worry about. Fundamentals still in place for growth.
CRASH?? No way they say drawing upon comparisons with the past.
This is not the past it is now.
There is one glaring fundamental that they all conveniently overlook.
The Jap Yen. It is hugely undervalued. It has been used as a source of financing for vast borrowings to purchase WORLD WIDE assets at minimal costs.
Now what appeared a no lose situation has become wobbly.
Where do we go from here? The past cant tell you. This scenario is new and unprecidented.
The worm has begun to turn.
Look east young man,that fortells the future, the YEN is the key.

You've hit the nail on the head several times in that post....a good post!

I've done well this week. Unusually for me I was long Dow overnight (being long is unusual) when China plunged almost 9%. I woke up that morning, wiping the sleep outta my eyes expecting the Dow futs to be +/-10 from previous night's close ....DOWN 55! WTF?

An urgent check revealed the China story, so I took the hit on the chin & instantly closed my Dow long .....I then started shorting the @rse outta the US indices (Europe had reacted a little more than the US futs were factoring in)...& thank heavens I did - superb run.

It's little surprise that were seeing all the VIs being wheeled out with the usual wearisome soundbites ..... "exc buying opp, healthy correction, this aint no '29, blah blah"....truthfully, I have no idea whether this is a correction or the start of something big (the future certainly ain't bright but I suspect there'll be an element of denial which will make for severe spike ups followed by prolonged slower falls), but definitely the game has changed for the short term future.

Once the world's indices were steered but US, now it's Asia & the YEN.

I bet many traders didn't even have $/Yen on the radar (definitely not china H Shares!)...I also wonder how many indice traders really knew about the carry trade & the implication for it's unwinding.

From a personal point of view I'm very happy to see it's unwinding...I'm married to a Brazilian & Brazil is obviously one of the so called BRIC countries & has benefitted massively from the influx of foreign capital in search of a high yielding home...this has made the Brazilian currency very stong (which is rare!), & therefore everything has become tmuch ore expensive for me over there (land, holidays, food, clothing etc).....the carry trade unwind should at least reverse that in part.

 

[dcraig1]

Grant
The US Government,in fact the whole nation consider all foreigners to be working against their interests.
Here again the worm appears to have turned.I read recently that a line has been crossed and foreigners now earn more from their US assets than the US does from its foreign holdings. (Correction or positive data welcome )
As for the idea that everything in the US garden is rosy,the ripples from the Sub Prime mortgage market are deepening.

The US - the world's hedge fiund:

http://www.atimes.com/atimes/Global_Economy/IB27Dj02.html

 

[mickandpete]

The US - the world's hedge fiund:

http://www.atimes.com/atimes/Global_Economy/IB27Dj02.html

Nice one Craig
Short and sweet eh
Your post NOT the article

 

[dcraig1]

Nice one Craig
Short and sweet eh
Your post NOT the article

AsiaTimes Online is a great source of some very good articles obviously concentrating on Asia, but also Middle East and US. Well worth a regular look. CIA was advertising for recruits on their front page at one time, so they obviously consider it a quality publication.

 

[grantx]

Red Duke,

What’s 200 billion between friends? There’s a saying, If you owe the bank a few thousand, you’ve got a problem. If you owe the bank a few million, the bank has a problem.

Now if the US does not heed Chinese advice re supplying missiles to Taiwan, the Chinese just may start dumping their treasuries. What will this do to the dollar and US bond markets? Stronger Yuan, expanding Chinese exports, greater Chinese growth. Trebles all round.

Mick,

“foreigners now earn more from their US assets than the US does from its foreign holdings”. A bitter irony.
Fannie Mae, Ginnie Mae, Freddie Mac, Doris Day – they’re all tightening their lending criteria. It will be interesting to see how this pans out.

DCCraig,

“CIA was advertising for recruits on their front page at one time, so they obviously consider it a quality publication”. No, this was entrapment – they were looking for anti-American subversives.

A couple of Chinese sites to consider (in English):

http://www.sse.com.cn/sseportal/en_us/ps/md/sh_b_qci.jsp

This is the Shanghai Stock Exchange site. The main index is the Shanghai Composite. Shanghai is 11 1/2 hours in front of London. Click under Indices for all available indices.

http://english.cri.cn/business/

This is Chines news. An interesting point re the sell-off in world markets from the ‘Grey Tuesday’ article reprinted from the Economist:

“One of the oldest market mistakes is the assumption that you can get out of a position as easily as you entered into it. According to Goldman Sachs, the latest jump in the Vix (a measure of stockmarket volatility) took it eight standard deviations from its average. If conventional models are correct, such an event should not have happened in the history of the known universe. Then again, the move in energy prices that caused the collapse last year of Amaranth, the hedge fund, was a nine standard-deviation event”.

And records are made to be broken.

Grant.

 

[dcraig1]

“CIA was advertising for recruits on their front page at one time, so they obviously consider it a quality publication”. No, this was entrapment – they were looking for anti-American subversives.

I very much doubt it. Why would such a person apply for a position with the CIA and advertise they were a "subversive" ?

They are looking for people with an interest in such things who read material that is not just regurgitated stuff from the news wires. One does not derive benefit from reading ATOL for example, only if one agrees the the political position of the majority of correspondants. For example, I sometimes read Debka (run by Israeli Intelligence) without having any sympathy at all for their politics and in the knowledge that disinformation is sometimes published.

 

[rainman2]

First of all let me also thank Mr M for encouraging us all to think for ourselves, this is what its all about...at last a debate that can go somewhere if it can stay on track! Ive been doing plenty of thinking, geez I was at work at 8am this morning, just got home (11.45pm) and will now stay up to record some more observations, pass the coffee please A few more weeks and Ill be booking into the Priory with all the big brother numpties.

Anyway if its ok with firewalker et all may I participate with my two pence worth (hope im not miles of base, but hey, its all a learning curve!

Right for the past few weeks the market (DAX in this case) has been struggling to muster up any real strong demand. In fact the last 2 weeks appear to have been moving up on weak shorters closing their positions, just nudging the market slightly higher each time. Then on the 20th feb we had a bit of action to the downside which was bought back up quickly. The next day had even more action down, this to me showed a sign of possible things to come (maybe a baby swan lost down stream?)

The market is marked up on the 22nd but yet again no real demand apparent, also couldnt hold the highs! Long holders at this point should at least be a bit cautious, especially with the possibility that mother swan maybe tring to find her baby

Gap up again on the 26th to 4/5 year highs and yet again no real buying, alarm bells... especially with the US having been down for the last 3 days!

Ok the market falls pretty hard (not saying crash or anything like that) taking out loads of stops on the way down, but baring in mind the move over the last 3 months there were alot of weak hands in the market on the way up from various levels so this depth of fall isnt out of this world!
If the pros hadnt taken profits before, then they must have liquidated a chunk on the way down adding to the speed of the move.

Now at the end of this exciting day,we can see that there was not a decent bounce all session and if we dont get one straight away the next morning then this tells me something about open positions in the market. Also baring in mind the action for the day, if weak hands werent willing to buy before, then surely they arent now. But hopefully we will get a idea the next day. Ok, on the 28th we opened up, pros making sure that they profited from sell positions, but from then on the market pretty much dies off. This must be a strong sign that weak hands were only SELLING TO CLOSE on the 27th, not to iniciate NEW OPEN POSITIONS to the short side. Had they opened to the sell side then they would have been late shoters and going by the volume at lot of them. Thus when the markets opened up the next day they would have been force to BUY TO CLOSE which would have caused massive velocity to the upside which would have encouraged weak hands to buy thus creating even more speed upwards!

As we can see this didnt happen the Dax made its way upto 6790 (march) and fell down again.
So....for pros looking to re-accumulate they need weak hands on the short side, and this has yet to be achieved. It doesnt mean that there will be no more buying from this point, indeed any weak buyers can be exposed to the downside creating the action that will entice new open short positions that the pros can take advantage of.

Maybe something a bit like the image below. So, the market may still have further to go down, but I dont belive its anywhere near as bad as many on these boards are making out. I guess the baby swan will find its mother without her getting too anoyed....at least for now

I hope this post isnt too long and boring for you all. I just wanted to have a go as i dont post that often.

Mark if im way off base please be gentle, give me a mark out of 100, its will sound better that out of 10, unless its 1, or 2 then it will be s**t, and of to the Priory I will go with my Kylie Minogue CD

BTW hope you are better soon, and thanks for all these thought provoking sessions. Must go got a head ache now, its tooooo late.

Regards D S

dazshaw,

I was rereading your post(#277) and analysis and just wanted to acknowledge what a great job of reading the intent of the market.
If I may ask, what made you pick pick the bottom levels that you did (you nailed the bottom almost to the tick)?
Also, now that were at the levels where you stopped your analysis, what in your opinion happens next?

once again "great job" and if you have anymore thoughts on 'selling to close', 'new open positions' and 'buy to close',and how you can tell the difference, I for one would be very interested to listen.