$dax #dax Weekend Review

Monthly Chart

Of immediate note is the current position of the stochastic in the first sub-chart which has reached the trend line up from the 2009 low with the RSi still pointing down. This has coincided with a sell signal on the bar above which signifies a turn down in MyWave, with price seemingly rejecting the brown regression perimeter low from brown 'a-b'. The distance from the cloud and the pink dashed FLD, suggested that a move towards the green regression channel low might be on the cards if the pull back to the brown line did not occur, and that weekly close on Friday night suggests continued bearishness. Although, I expect a retracement to test above, a move closer to the pink FLD, would be great hunting grounds nearer 8500. Note that the FLD is the half cycle ahead of the MA median of the volatility range that I use based on the Fibonacci extensions of the ATR (channel not shown). If price keeps above that, I assume the trend remains bullish. If price cuts it and stays below after a test, I assume price will travel the same distance below than it was above as a minimum. If a 'cut' occurred, that would see price into the cloud, a lot lower, nearer 6500.

Solar Cycles

I had posted this weekly chart during the week to point out that this bearish tone to the long term bullish market was occurring at the half way point of the average 11 year solar cycle, if the 2009 low was assumed to be the end of the last cycle. The first average in the MA band is starting to turn red, which represents the 9 year short cycle periodicity, and the trend line just broke in the week. However, price is still inside the upward moving regression channel from the 2009 low, with the lower perimeter nearer 7700 if the rate of the drop continues at this pace - this ties in with the green regression line in the monthly chart. That weekly stochastic and RSi formation however, has me doubting the oversold bearishness in the short term. That pink dashed line in the monthly chart at 8500 may well be the decision point. If this is the case then perhaps the longer term solar cycle of 14 years might be nearer the mark, giving the market another drive up. I wonder what the ECB might do to fuel a final thrust.....um.

Weekly Chart

I had also posted this chart Friday morning highlight the 100% extension of 'a' at 8732, to test the bottom of the weekly cloud. I wimped out myself in the early evening at 8815, but had had two goes at drops from the 8900's that day, so was happy enough. Price is below the weekly pink FLD and shows the rejection of the brown regression line clearly, but there has been no Kiss Goodbye which makes me think the oversold conditions could set up a flurry higher. Obviously, MyWave is bearish and both the stochs and RSi ended the weekly sniffing the gutter, so the 123.6% extension could be just the stretch to usher in a jump - this again ties in with the pink FLD in the monthly chart at 8500. My general outlook is to expect a push down into the 123.6% and then a pull back. If the pull back represents a 'b' wave or something more impulsive I don't know or care at this stage, but I am not going to be overly bearish without pull backs intraday on the 24 pip chart - see later.

Daily Chart

The oversold stochs from last week continued to ignore warnings but has set up positive divergence on both these and the RSi, with the obvious neckline cut on Friday. I am sure I would not be the only one hoping for a pull back to the cloud and FLD before a thrust through the neckline again but I have given up long ago trying to impress my storyline on the market outside intra day moves. For me, the divergence is holding so far and a break above the neckline could be dynamic - I don't want to be caught short at any point without nearby cover into any further drops from here.

8hr chart

However, the 8hr chart is as clean as whistle at the moment with little to suggest momentum downhill is waning. Don't think I'll be trying anything uphill until MyWave at least shows a bullish hand and until then, looking for strength to short on the range bar studies is the way to go in my opinion.



24 pip range bar study

I am using this count for the wave down and if my count is correct, we should be putting the final thrusts down - note positive divergence holding. I like to count in 3s, but others might want to put 1-4 in where my capital letters sit. Of course, what comes next is another matter, but any cut of that higher blue dashed line in the chart at 8900, would break the cloud too - wanna be careful above there me thinks.

Have a great week everyone.