$dax #dax Weekend Review

Relativistic Electron Forecast Model for Saturday 13th September


The model forecasted the Dax's behaviour last week pretty well, suggesting that I look for strength to sell. As I mentioned yesterday, forecasts of rises in high-energy (relativistic) electrons over the weekend had me looking to close shorts early and indeed, Monday's forecast looks bullish for the Dax. If the market does not gap up, or even better shows weakness from the open, I will probably be looking for opportunities to buy.

So what does the Technical Analysis look like?

Monthly Chart:

I am working with the Elliott Wave count that price is currently in a 'b' wave in wave 4, from the 2009 low of 3588. As there has only been one wave down in the overbought stochastics since the high, the distance to the Ichimoku cloud, the bottom of the volatility range and the monthly 200sma, I am using the pink dashed resistance line as a potential rejection zone in the shorter time frames for wave 'c' down in due course, of either wave 4 or wave A of 4.



Weekly Chart:

Following a retracement of the 23.8% line from the wave 2 low to the wave 3 high, price has made it back to the pink dashed resistance line and the gold dotted median line of the volatility channel. Price had also bounced out of the weekly Ichimoku cloud and the linear regression channel perimeter. However, the RSi on the weekly chart is still negative and MyWave in the main chart is still red for bearish. The stochastics in the first sub-chart have followed the rejection from the 23.8% zone, but the trend bands in the same sub-chart have just turned down, despite the pull back. The weekly chart seems to be rolling over and fits with the 'b' wave of wave 4 or A of 4 from the monthly chart. However, this is big picture storyboarding and of little use to me intraday, although the higher price action pushes into the pink dashed line, the more concerned I would be with taking bullish positions, and more likely to be selling into strength again.

Daily Chart:

Price has so far rejected the 76.4% retracement line of the move up from the 8902 low and the top of the daily volatility channel, but in a subdued fashion. It does look corrective so far with the daily MyWave still bullish. The stochastics have let off a bit of steam this week and the trend bands in the same chart are even setting up for a bullish cross, with a bullish RSi study, if any upside is seen. However, if another move up into the 9800-9900s is seen, the stochs will still be overbought and I'll be looking at the monthly/weekly set ups for selling into strength. For now, I am looking at the daily Ichimoku Cloud  and daily 200sma to provide support at around 9500/9550 to buy again, subject to the lower time frames cycling in the correct fashion.

4hr chart:

The 4hr chart has been building a downward channel off the 9782 high but with those stochs starting to look oversold and the trend bands in the same sub chart still bullish (white over orange), the price action here does seem to be supporting suggestion of a move up in due course. The lower channel perimeter of the upward regression channel and the 4hr Ichimoku cloud has not been hit yet and MyWave is red for bearish, so I will start the week off looking for more strength to sell but then buying weakness into those zones into the 200sma. This all depends on the hourly cycle playing ball and with the REFM model at the top of this post calling for a bullish open, I'll be as flexible as the market action requires me to be.