Disclaimer

Disclaimer: This blog should be read as a 'whiteboard' of my daily thoughts and ramblings and specifically not, in any way, advice to trade. My interpretation of the works of Gann, Goodman, Fibonacci, Elliott, Hurst et al; is entirely my own and should be read as such. Any opinions, news, research, analyses, prices, or other information contained in this report are provided as general market commentary, and does not constitute investment advice. I will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.

Sunday 19 October 2014

#dax $dax Weekend Review

Monthly Chart

In the big picture, this whole move down is considered to be part of a wave 4, inside two upward facing regression channels from both the 2003 (green) and 2009 (red) lows. The price action is also above the green cloud bordered by the pink & yellow displaced MAs, also adding to the bullish overall view. However, the stochastics in the bottom sub-chart support an ongoing retracement, rather than one coming to an end, with the ADX concluding a bullish vs bearish 'pinch' decision some time soon. There is plenty of room in both the regression channels, and the height above the cloud, for an ongoing retracement downhill and it is that scenario that I favour for a while yet



Weekly Chart

The weekly cloud continues to look generally supportive, with the ADX bear (red) line looking like it needs to come back down and kiss the blue bullish line. The ADX trend line has recent turned up of late (white/green) in support of the recent declines and if I am reading this correctly, it should decend again (turn white) as the red ADX bear line declines in the sub-panel. What I am looking for is the stochastics to rise a little in the bottom sub chart, as price moves back up towards the pink MA above in the cloud in the main chart, but with the ADX line dropping down again in the 1st sub chart, as the red and blue ADX bear/bull lines join up for a kiss. Once that kiss occurs, if the red ADX line can stay above the blue with the ADX trend line then turning up in green, we should see the falls continue. But in the interim, a weekly retracement up within the monthly retracement down. I do not know if the 'c' wave is actually over or not, for blue 'A', but until the recent low is tested, I'll be playing for a drop first, regardless.

Daily Chart

The daily chart shows the same position as the weekly as far as the ADX is concerned - the red bear ADX line is very high and is likely to want to drift down to kiss the blue bull line. Obviously the stochastics at the bottom are oversold too, and price has been pushing up to the neckline of the H&S. With the daily cloud forming overhead and the choppy overlapping price action last week, I have to assume for now that we are seeing corrective price action into both that neckline and cloud. Unless something else happens more impulsively, I anticipate we are either in wave 4 with a another new low coming at some point or a blue wave 'B' which will last longer than a wave 4 but will still end up with new lows. Once the test of the 8351 low is out of the way, I'll focus on the upside but I'd rather play with the bulls lower than here.

I'll include the 4hr and lower in timeframes in my intraday report, so that is it for tonight. Generally, I am looking for price to end this initial rise up from last week, if it is not over already, drift lower to test the 8351 low or go lower, then ping back up again to test that neckline or higher, but only in a 'B' wave. Only if we see very impulsive price rises, will I conclude that anything other than a retracement is going on to the upside on the daily time frame.

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