Thoughts about market short term conditions 3.5.2012

In despite of the trading models and algorithms, I see market in an interesting condition. My personal attitude is currently a slightly bearish, so it is easier to see the negative signs.

EUR-USD has been trying to get below 1.31 for a while. Breaking below 1.3 could take it to near 1.27 which should also take the stocks down. Also (high-risk vs. low-risk) AUD-JPY has been in a downtrend since the middle of March and we just saw new lower low. Will we see it falling below 81? At least the fall of both these currency pairs would definitely bring the stocks down in a short term.

And look at Dax while it is again about to try how the bigger rising trend line holds. If Dax breaks below the trend line, then 6544 is a definite. Although Dax has been trying to break below 6544 already since April 10th, this time the probability for a break down will be higher. Maybe we will see 6244? S&P 500 breaking below 1380 would take it back to 1357.

Without any serious bad news, the previous outcome should be enough to interest big players to push the buy buttons. At least the world seems to have a faith in US market and remember, stocks doesn't equal the economy.

Dax indicators 2.5.2012

According to to my earlier posts, we are currently consolidating. The range remains unknown even 6750 seems to act as an important support/resistance.

20 day highs vs. lows seems a little bit sloppy at the moment. Could it turn down?

Also Dax cycles seems to be going down.

Dax strength indicator is currently in a consolidation area. I have marked the previous areas by red windows. So, don't expect higher close than 6800 during next be 1-3 weeks. Intraday highs don't matter.

Risk indicator came down as it was supposed to come.

Dax technical 27.4.2012

In a technical perspective, it looks like Dax is trying to touch 7000 or Fibonacci 6974 (78,6%). There is also intermediate declining trend line abobe 7000, thus judging bigger trend. Currently the longer term uptrend still holds confirmed with a touch to major rising trend line and major support at 6544. Additionally short term declining trend lines for Dax and RSI were broken upside. RSI and MACD are also showing some strength.

Dax indicators 16.4.2012

The support at 6544 managed to hold, so now we can try the opposite direction and above 6800. RSI is already making higher lows, which is a positive signal.

20 day high-low ratio is already at low level comparing to normal cyclical behavior.

Dax modified RSI is also showing sings of a bottoming process.

Also the risk appetite is growing. 

Overbought and sold already converged, so the best shorting opportunities have gone so far.

Dax volume indicator is in unison with Dax. 

Bear territory seems to end soon.

Dax indicators 28.3.2012

Yesterday's call for a rebound canceled. It is not wise to try catch a falling knife at this point. There are evidences that we will see lower lows and lower close ahead. 

Dax volume indicator trying to lead the prices down.

It is always bearish when Accumulation/Distribution falls into negative territory...

...combined with investor's reduced willingness to take risk it almost guaranteed that Dax will have lower close during next 5 days.   

Dax Cycle is trying to point down.

McClellan Summation Index is already bearish.

The most important level tomorrow is 6974 and 7050. Below those levels we remain bearish and keep 6600 as our 5 day target.

Today Dax could climb above 7000 (target 7016), but eventually fall below 6900 (target 6895).

Dax indicators 7.3.2012

Dax failed twice to get through 76,8% Fibonacci level. Yesterday's rebound was highly expected, but if this was double top reversal, then it would give 6487 as our next downside target.

Dax Volume Index made lower close two days ago. Additionally, this was 20 day low which indicates...

...over 90% probability that we would see another lower close in Dax during next 3 days.

McClellan SMI is indicating a downtrend.

20 day highs vs. lows is indicating a downtrend.

Dax indicators 2.3.2012

Ascending triangle (bullish) or Rising wedge (reversal/bearish) in the forming?

Break out from ascending triangle would set the upside target to 7300. However, ascending triangle would need a volume contraction, which hasn't happened at the time. Other possibility could be rising wedge, where Dax could still rise above 7100 and then fall. Anyway, we will be a little bit wiser on Monday when Dax should have two options: either gap up near 6970 and then break above 6990, or gap down and close below rising trend line and below 6900, and thus increasing the odds for a reversal.

Dax cycle has been pointing down for a while.

McClellan Summation Index has been pointing down for a while.

More companies have performed negatively during last 20 days.

Dax volume index has negative divergence with prices.

Riskier companies (TecDax, Small Cap Dax) with high beta underperformed during last week.

S&P500 resistance 17.2.2012

The recent money flow statistics has some evidence that the next two days would be bearish. This would be verified with the current resistance level S&P500 is facing. At least the index has tried to break above 1358.6 but haven't succeeded yet. There is also the previous April 2011 high at 1376.1. S&P500 remains in an uptrend above 1345.

Dax short term 2.1.2012

In simple graphical terms, seems like Dax is in very interesting situation. 61,8% Fibonacci and the upper descending trend line have been reached at the same time. Obviously we have to get some good news to help Dax break up. Otherwise, when we will fall from this point, the bearish signs I earlier mentioned are becoming stronger. I try to be very objective, but there are already some bearish signs and the upcoming weeks haven't been historically bull-friendly, so extra cautiousness at the moment is very much needed.

Dax intraday 22.12.2011

Break and closing above 5898-5900 would make 6024 as a short term target. If we cannot decisively break the declining trend line and fibonacci, the market has to pull back to try another time.

Dax sentiment week 51

Symmetrical triangle

Dax has been forming a symmetrical triangle. Now, we are waiting for a break out. This could be a little bit bearish, but I am not counting too much into that. Dax finally managed to get above 5767-5771 and yesterday it offered plausible support. So, if Dax cannot manage to break the declining trend line at 5890-5900 (or the upper at 6090) and begins to build a descending triangle, this would be bearish sign. This would be verified if Dax will re-test 5767-5771.

20 day highs vs. lows seems to be in a neutral zone. Thus, no trend here.

Currently 20 day stock performance is a slightly bearish, but when this indicator rises the odds for the bulls are also rising.

Again, overbought / oversold condition have no clue about the direction. No clear trend here either.

Dax cycles is also stucked at the neutral zero zone. However, it has made a lower low recently, which could indicate lower levels to the Dax. Apparently this could take 1-3 months.

 Same here with volume index which made lower lows. If the underlying situation is leading Dax and the politicians won't manage to manipulate the stock market, now it seems to be wise to trade in a triangle / range and wait the big move after the break out has occured.

According to Cognitrend sentiment studies, the optimism among Dax investors is at the highest level. Should I be concerned?