DAX Outlook Thread

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DAXtrader54

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I am looking to start a thread which provides some simple outlooks for the DAX based on local news and sentiment from financial companies and traders in Germany, and also technical analysis, predictions and trades that are being placed during the day/week. I would ask for feedback and contributions from any similar minded traders. Thanks for reading.

DAX Midday Outlook 03/11/2014

Sentiment from Germany

“The equity markets are fundamentally cyclical. In this cyclicality we have the known year-end rally” says Friedemann Wagner, Managing Director of PEH wealth management. At the same time, the asset manager states: “As with all well-known stock market phenomena, nothing is certain it occurs only with high probability. ”

Michael Dutz of the Adlatus asset management is optimistic for this year: “Yes, we expect a Dax final score of 9,800 points in 2014″. And he gives investors a clear guide to action: “Who wants to experience the year-end rally, must act immediately and buy Dax from 9,200 points”.

Trading So Far

In a word: choppy

Directional bias: currently intra-day bearish as we pullback from Friday’s high.

Commentary: we have breached Friday’s value area low and have started the descent again towards the deviation low after piercing it earlier today. There is currently disparity between SPX and DAX perhaps because ECB are currently caught in between two major monetary policy decisions Fed vs BoJ who are on two opposite ends of the spectrum and some report that ECB are unlikely to improve TLTRO terms currently. But looking back over the years, the last two trading months of the year tend to be fairly lucrative for investors as companies look to squeeze out maximum value from the share prices for reporting purposes.

I still have a feeling that Thursday the ECB may spring a surprise similar to Japan.

I have placed a trade: Trade0041 | BUY DAX @ 9205 | SL: 9052 | TP: 9577 | 03/11 @ 11:43GMT | #forex #signal #DAX
 
Ahh, I think you have incorrectly judged my site by not looking at the explanation in my content.

My own trade alerts I publish freely on twitter, which you have correctly found, and published freely on my blog. I am not a premium service and I have no product to sell. If any of my readers want a premium service then I can recommend a service, which is perhaps the link you have found, but this service is not my own.

Thank you for looking
 
DAX Market Summary 03/11/2014

DAX Related Headlines (original article on my blog)

It’s time to say Auf Wiedersehen to Germany’s economic miracle
Blame Germany for bad policies, not its reluctance to spend more
German market in negative territory

DAX Commentary Summary 03/11/2014

Looking at the bigger picture, profit-taking seems to be providing a break for the rally, in fact we may possibly even have time for a consolidation. There was a survey completed in Germany recently and one third of the respondents assume the current movement in Dax maintains upward momentum. Six percent have declared the bottoming phase ended and now expect immediately a new high. Unfortunately the pessimism is quite high: Overall, more than half of the voting participant does not expect any further price increases in the short term.

I personally believe investors are just waiting for a buying opportunity. Falling prices would consequently be used very quickly for institutional purchases.

A negative day, across pretty much all the 30 components today, in fact 90% of the top 10 companies, by market capitalisation, that make up the DAX are currently reporting a negative day. (Correct at the time of writing this article) Nothing unusual based on the large Friday session. Prices currently trade under the 24 hour vwap and actually trading at the 200-day EMA. The 61.8 fib level is not far from acting as an area of confluence with the 200-day average, giving the bears hope of further decline tomorrow and the rest of the week. But looking at the daily chart for the last two weeks, there is a strong pattern emerging; strong up day, smaller pullback the second day, strong upside the third day, small pullback the fourth day etc. Today doesn’t look much different on the chart. Webarely breached Friday’s high today and instead retraced around 50% of Friday’s gains. Eyes now turn to Thursday’s ECB decision, specifically in whether or not they spring their own surprise, much like Japan did on Friday.
 
DAX Market Summary 04/11/2014
On November 4, 2014 by Chris Bailey

Main Relevant Headlines

ECB becomes Banca Schizophrenia

Europe needs fiscal stimulus, not the ECB

All eyes on ECB monetary policy meeting

German manufacturing rebounds in October
Interesting DAX-related Articles

Whilst reading German newspapers I read an article from Georgios Kokologiannis who suggested a reason for choppy market conditions in the DAX can be because yield estimates of analysts for German corporations are far too optimistic and the stock prices have decoupled from current economic fundamentals. He goes on to state that the DAX is expected to get back to just under 10,000 points and forth in the next couple of months, particularly highlighting that it is only because of a persistently ultra-expansionary monetary policy

There is not a huge amount of European-related economic data released today, but in terms of equity-based fundamentals, there are three DAX companies releasing quarterly results: BMW, Continental and Fresnius.

DAX Technicals
The last half hour of yesterday’s session saw a jump up towards the vwap, which you can see on the chart below. There is confluence between the naked vpoc and the vwap so the 9276 area is key tomorrow because it was one of the highest volume zones. Do we bounce down from there or break it and build from there? I would sit out and watch, a break up or break down strategy. I published a prediction on twitter yesterday (see picture to the right) which outlines a strategy to follow.

There are a number of bearish signals in the short term; 61.8 fib zone, 200 day EMA, short term resistance, SPX is slowing down, risk of consolidation etc. But I think a common mistake to make at this stage would be to think that the pullback we are about to experience is another reversal. I can’t see the doom outcome happening in the next two weeks, only further upside.

Key Levels for the Charts are detailed on my blog
 
Original article with images is posted here:
http://www.daxtrader.co.uk/dax-midday-update-04112014/

DAX Midday Update 04/11/2014

We opened up to some volatility today. We took out the deviation low pretty much straight away and then rocketed north to take out yesterday’s entire value area and kiss off the deviation high. Lots of opportunity for scalpers who rode that move. The move reversed intra-day back down to the deviation low and is now settling towards vwap and the naked vpoc.

My chart for Dax has given me a sell signal on the m5 chart, but I am not interested in scalping or intra-day trading the DAX today as forex seems to have taken my interest and delivered results this week.

I have a buy order at 9,205 which has yet to be filled. I am aware that the SPX has developed a thin spinning top pattern on the daily chart and not showing much strength today either, but I will keep it open in the meantime and see how it develops.

Current bias: choppy/slightly bullish

Good luck trading
 
So another down day today, not dis-similar to last Friday/Monday. The pullback continues and there is perhaps further downside risk tomorrow as markets ready themselves for the ECB meeting. There is continued risk to the Eurozone with growth forecasts being slashed, UK threatening to jeopardise relations with Merkel over immigration policy, but there is still a positive outlook on the equity markets based on the fact that money is flowing from Japan and this will line corporate pockets and inflate shares, with perhaps more of the same from ECB, perhaps…

Despite the pullback the hourly chart still shows an upward trend and the trend defining level resides at 8900 level, as we’ve been making higher highs and lower lows. It seems we are currently in a potential ‘higher low’ creation wave. You’ll notice as well that the 9150 is an area of resistance=support so tomorrow will tell how strong that area is because there will by downward pressure. I think bulls, like me, will use a 9150 level to buy and resume the uptrend so I am happy that my order was filled today.

Trade0041 | BUY DAX @ 9205 | SL: 9052 | TP: 9577 | 03/11 and now we wait and see, this one could be out there for a while and I may take pieces of it off the table depending on how it performs.

As for intra-day, we have pretty much traded underneath the vwap all day and the volume profile shows fractured distribution with a clear 9250 zone being the highest traded price. The daily chart shows that volume picked up from yesterday and if price drops below 9100 I feel volume will pick up even more as institutions begin accumulating and adding stock to their funds, taking advantage of the ‘slightly-less-overpriced’ assets.

I wasn’t particularly active today in the scalping side, but there are opportunities if that type of trading fits your risk profile.
 
Original article: http://www.daxtrader.co.uk/dax-daily-market-outlook-05112014

On Monday, the Dax decreases 0.8 percent and yesterday minus 0.9 percent. On Wednesday morning, the stock market barometer, however, was on the road to recovery: The Dax rose – and by 1.2 percent to 9272 points. The current corporate reporting season has crated some good news in the German stock market mid-week. The ECB could soon provide an even better trading atmosphere and the upcoming Governing Council meeting and the publication of US employment data on Friday creates further hope.

A taste of what is to come regarding the US labor market comes today with the private ADP employment report release. The state of the labor market helps the Fed decide when it will raise interest rates and reduce their expansionary monetary policy.

Outlook for the rest of the week: Bullish

KEY LEVELS
Daily R2 9398
200 Day MA 9345
Value High 9299
Naked VPOC 9251
Daily Pivot 9228
24hr VWAP 9227
Value Low 9155
Daily S2 9058

My original prediction at the beginning of the week still stands and my trade is currently up by over 70 points. I will let it ride and see what I can get from it.
 
Last edited:
Original article: http://www.daxtrader.co.uk/dax-midday-update-05112014/

Well everything is going as predicted so far, so this update will be fairly short. We have cleared most of the levels to the upside today and are currently hovering around the deviation high. I suspect there will be a pullback this afternoon before further upside. If we break below 9300 then there is a low volume pocket down to 9280, perhaps an opportunity to add to positions there.

My trade is still active, Trade0041 and currently sitting on over 100 points profit so I am very happy with that so far, I am avoiding the temptation to take money off the table, because I believe that we have plenty more upside. I am not scalping, this is a swing trade which I am happy to leave.

I can not see us trading much higher than 9375-9400 today. This is the daily R2.

Intra-day bias: Bullish

Overall trend: Bullish

Target: 9500
 
Last edited:
Original article: http://www.daxtrader.co.uk/dax-market-summary-05112014/
Dax Market Outlook

I have been reading a few articles today and am starting to believe that falling energy prices and commodity prices are pushing the probability of Eurozone inflation dropping below 0% to an incredibly high level. There is belief that current monetary policy in the Eurozone is having little effect on the core countries and US-style QE may have little effect. Brilliant article here: http://www.project-syndicate.org/co...eurozone-deflation-by-john-muellbauer-2014-11

The are a number of features describing the breakdown in relationships between some of the member states, calling Draghi’s management into question and specifically calling the ECB house divided. Draghi critics are many and the topic of “Eurozone crisis” has attracted doomsters for months now, the real issue is that US-style credit easing probably won’t fit the EU model because the eurozone countries, specifically Germany, are not as heavily reliant on credit as they are in the US. So he doesn’t have an easy job, especially as he also has to manage the member states not really feeling the love for riding the EU bus every day as well provide a solution to monetary policy problems. So tomorrow’s meeting will be interesting.

Make sure you have stops or expect large potential losses, I suspect potentially massive volatility in the currency market, potentially large volatility in the bond market, depending on the decision and the equity markets will see turbulence too.

Dax Market Commentary

Daily chart shows a decent bullish day, all but restoring parity with Monday, currently stalling around the daily R1 level. Big picture is still bullish. Intra-day on the 4-hour we could see a further pullback to 9250 again before a surge through the 9320 level. We are still making higher highs and higher lows. Hourly chart we are still in the upward channel, no major reversal signals on the technicals. As for the volume profile, today we saw an interesting double-distribution day today (F-Shape) with price failing to break out of the 9320 zone. We are currently ranging in between the last two day’s value area high zones.

Slight concern for the bulls is the 61.8 fib zone from recent swing high/low and 200 day moving average is still providing an area of confluence. We are going to need a catalyst to break through that resistance if we want follow through. ECB meeting should do the trick. For those already long, I would hold. I probably wouldn’t enter a long position at the moment, wait for a pullback for a better entry. Be aware of the risk that we could see a reversal from current levels, but I am still outwardly bullish personally.
 
More Dax articles and Dax analysis here : www.daxtrader.co.uk

There was little nervousness in the market yesterday as we had a decent bull day. All eyes on ECB today, perhaps nothing extraordinary will be released but his press conference should be interesting. Either way, expect some volatility. Price action is stalling between 9250-9350 and we are struggling to break overhead resistance, lots of it too.

Bearish case: growth slowing in Germany, manufacturing and factory orders disappoint, austerity still being preferred, massive overhead resistance with 200-day EMA, 61.8% fib level and current highs are acting as areas of confluence.

Bullish case: money is being printed, further money is likely to be printed, oil prices are a key key reason for higher indices currently due to higher margins and lower costs for companies. It is currently reporting season for equities and that provides an opportunity for companies to have a last push for stock price inflation before year end.

Today my 5 minute chart is providing some sell signals based on the technicals, but it seems to be the fundamental case it can not consider. The bears vs bulls argument is finely balance and a catalyst is needed for further movement to get us out of this range.
 
Original article: http://www.daxtrader.co.uk/dax-midday-update-06112014/

So Draghi is again pledging his commitment to the bolstering of the central bank’s balance sheet which has cheered investors in Germany and given the much needed catalyst to burst through the significant overhead resistance we discussed this morning. The statement and Q&A was perhaps more dovish than anticipated, discussing ABS purchases taking place for two years at least, having sizeable impact on the balance sheet. The decision was unanimous effectively contradicting the view that there is friction and differences of vision regarding the eurozone monetary policy.

These ECB press conferences and Q&A sessions bring enormous volume and volatility to the EU equity markets, not dis-similar to the effect that NFP has in US.

I have personally cashed out my Dax trade which had plans for approximately 9550, partly for profit taking but mainly because I was unable to close out only half of the trade, so I decided to just take it all. +263 points on the trade and I am waiting for a pullback towards 9350 before considering another long entry.
 
Original article here, including a trade setup for you: http://www.daxtrader.co.uk/dax-summary-06112014/

What’s being said in Germany

Commerzbank analyst Ulrich Leuchtmann wrote today the ECB has now formed a working group to prepare further measures. The theoretical possibility was discussed, but now it is clear that they will soon have a plan in the bag, which can be activated. Draghi has his finger on the trigger. This is a step forward from previous news and this pleased the market.

Purchasing government bonds is considered a last resort to avoid deflation, although some still believe that purchasing corporate bonds is the way to go. Markets would very much love that.

Thomas Meissner of DZ Bank was satisfied with Draghi’s statements saying that looking at the bigger picture we currently see no reason in our Governing forecast to change anything: The interest rates remain at their current low levels, and government bond purchases on a large scale is likely to start fully in the next year.

Germany to keep growing if political risks don’t worsen is a decent article too.

Today’s Trading

We wanted a catalyst to burst through overhead resistance, we got that. We extended as high as mid 94xx before retracing almost completely and settling somewhere in the middle. Intra day on the 5 minute chart I have a sell signal, 30-minute chart looks bullish, 4-hour chart I still have a buy signal and the daily chart is clearly bullish too.

I have closed my trade and am waiting another opportunity to go long, but feel we are currently a little inflated, I need another pullback to a decent buy zone. Somewhere closer to 9300.

I wasn’t intra-day trading today, I have been swing trading this week, but most upside key levels were taken out. Friday will bring a bit more volatility with the NFP. I am predicting a big number and am considering a gold long fade move after the announcement and some USD longs.
 
See full article including pictures and key levels for the charts here: http://www.daxtrader.co.uk/dax-market-summary-07112014/4

European equities mixed after Draghi’s speech

Big bull day yesterday, lots of news, lots of volatility and volume and generally after a big day we have tended to see a pull-back or at least a period of consolidation before the resumption of the overall trend. We have now seen two decent bull days in a row, and based on the trend over the last few weeks, I think we can expect to see a couple of slower days, Friday also tends to be a day for reversals. That would normally be my expectation/prediction, but today happens to be NFP day and anything can happen on NFP day. It’s kind of a make or break moment for the latest US monetary policy decision, if they print a massive figure (which I predict they will) then all is good, markets rally again and wake up on Monday with a hangover. If they print bad or on target then I go with my first prediction about a correction.

If the figure is horrendous (which I doubt) then there is a problem.



Daily Dax Technicals

I have spotted a slightly worrying sign that the steepness of the current bull trend is unsustainable, we have covered over 1000 points in just over three weeks and that is pretty unheard of without a correction. So you could argue that when price was heavily rejected from the 8300 level on the 16th, with an astronomical high volume day, we are still just feeling the follow-through now as new investors flood the market as the public participation phase sets in, cue the bubble theory.

So I would personally like to see a healthy correction for a couple of days fairly soon, to at least break the trend up a little. Take it off the boil for a moment because no-one likes it burnt out. It will continue upwards, but build again from a better lower level.

Hourly Dax Technicals

Here no-one can deny we are showing the basics of an up trend, higher highs and higher lows.

Based on what I said earlier, I would like to see a correction down closer towards the most recent low; 9150-9170 zone before I enter another long position. I will spend the day watching tomorrow to see how the market reacts, but I would imagin I would enter around the 9250 area targeting 9500.

Some interesting news to come up tomorrow, I have no open positions on the Dax and after an excellent week I am reluctant to chase something and would prefer the market comes to me.
 
LUNCHTIME UPDATE
Geo-political risk pulls market lower in this mornings trading with Ukraine government reporting that a column of 32 tanks has entered the country from Russia.

There is also divergence between the Eurostox and the Dax suggesting that one of them will need to catch up to the other one putting further downside pressure on the Dax.

The market is currently overbought in the short-term so I would personally welcome a small correction before a resumption of the downtrend, as I mentioned earlier.

Naked vpoc is 9288 and if we get there, we could extend lower towards yesterdays value area low of 9274 from there we target the deviation low, but it's unlikely we drop as far as that before 14:30GMT when NFP is released. I am long from 9250.

Good luck trading
 
Original Article:http://www.daxtrader.co.uk/dax-market-outlook-nov10-2014/

Following on from my summary on Friday, I am still of the belief that we are going to see further bullish action on the Dax today. I am aware of the technical argument for being bearish, but I think the bull case is stronger right now. Let’s see how the day progresses. The DAX top-30 index looked set to open 0.1 percent lower on Monday, according to premarket data from brokerage Lang & Schwarz at 0724 GMT

Dax Fundamental Analysis

Geo-political tensions are still present with the conflict between Russia and the West, regarding Ukraine. This is ongoing.

China release poor data suggesting a slow-down in the world’s second largest economy, increasing the expectation for them to commence easing.

Here are some of the potentially market moving factors from the major companies on the Dax (http://www.reuters.com/article/2014/11/10/germany-markets-stocks-idUSL6N0SX1E020141110):

ALLIANZ

Indicated 0.8 percent higher. Pimco has created a 225 million-euro ($279.75 mln) award program to retain top talent after the surprise departure of co-founder and Chief Investment Officer Bill Gross, Allianz SE said on Friday.

DEUTSCHE BANK

Indicated 0.1 percent higher. Co-head of corporate banking and securities, and head of corporate finance, Robert Rankin is set to join Australia-based investment holding company Consolidated Press Holdings Ltd as chief executive in January 2015.

SIEMENS

Indicated 0.6 percent lower. Siemens has agreed to keep its healthcare unit as a “part of its long-term, strategic core portfolio” and must strive for majority ownership even if the unit is listed on the stock market, according to trade union IG Metall.

VOLKSWAGEN

Indicated 0.2 percent higher. Volkswagen’s Italian supercar maker Lamborghini has more than 3,000 orders for its Huracan model, more than for any other model until now, Lamborghini CEO Stephan Winkelmann told Handelsblatt. He said revenues this year would rise more than 20 percent, as would the number of cars delivered.

Dax Technical Analysis

The weekly chart shows a spinning top suggesting consolidation and indecision in the market. Price stalled around the mid 94xx level but would not significantly breach 9150. Monday could be important to decide which direction we continue this week. Are we going to experience another pullback to add to Friday contributing to a further correction, or are we going to continue to the trend.

The daily chart shows we are still under the 200 EMA and the 61.8 (taken from the closes of the swing) so there is once again that overhead resistance we saw last week. Friday was an unsually large volume day, the last time we saw volume similar to that was the 16th which led to a reversal. I am not suggesting that this is happening again, but based on the need for a correction and the key levels of resistance above, I wouldn’t be surprised if it did. Then again, my mind keeps returning to the overall big picture: low oil prices, lots of reporting data to boost dax-related company stocks, year-end ‘santa-rally’ and free money flowing through from Japan and other easing economies.
 
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