Dax40. 15 08 2022. (click on charts to expand)
Pre Kick Off Notes
Dax broke out through 13800 on Friday. Key to hold for more upside today and this week. Levels below are pretty clear with 800 being the first to content with. We might expect a retest of this level today as it was broken in afterhours Fri. PCC below at 795. Whatever we might think about tops and bottoms we are clearly testing the upside here so not useful imo to be thinking of calling tops. Never is to be honest - why bother - it only sets up a bias in your mind. Better just to follow the pa and go with what we see. You´ve seen how S & R, key price levels, patterns and typical day trading set ups provide us with a great road map for entries exits etc - just stick to them. Nothing of note on the data docket for today. Ok - lets have it :)
Post RTH Session Notes
Poor trading session. Not much to do. Dax chopped about in a tight range most of the day while digesting the 800 after hours break out from last Friday. One loser for me long from S and then a couple of scalps thereafter. We can often expect this - its August and we had a break of a key R level at the end of last week so needs some time to decide whether we go up, down or just stick around doing nothing much. Hopefully it´ll be better tomorrow :)
Dax40. 16 08 2022.
Pre Kick Off Notes
Dax holding above 800 level after dipping and testing the downside yesterday. Looks constructive for more upside up to 14000 (see measured move) and still some way behind US indxs by all measures. Dax / Europe are a different story admittedly with war, gas weaker economy and the US are all up at decent R levels in terms of key R levels, Daily TL´s, 200 DMA´s and Fibs (less important). But if the past is anything to go by (and boy how we use the past lhs of the chart to figure out the rhs ) theres room for Dax to push some here. Whatever re US comparison, we work with and use our H1 S & R and unfolding read of the pa to act as our trusted road map. Zew up at 11 CET - not much else on the data front.
Post RTH Session Review
Decent trading day from regular levels and set ups. Bearing in mind what I said above about price looking to go higher, first up we could have gone long at the TL just below or at the open price level. If we missed that we could have jumped long at the retest of pmh and ridden it all the way to 1st decent R level at 950 and taken our first short there - if you wanted. If we sat in that short there were 200 points on the table down to the pml where we got the retest to go long again at a regular known entry level. There was around 100 points from that. All in all a decent bag was available from pa set ups and levels. Around 300 max available pts.
If anyone caught all of that - tremendous trading - big A star. Even if you took half of what was on offer - that´s great work:). And even if you only took one trade that is commendable. The thing is I´m not here to suggest that anyone gets everything that´s available. And I include my self in that. The point of what I do here is simply to show how my take on Dax pa works and how good S&R is a great way to day trade it. Its about learning how the Dax trades and being ready for action when we see our levels and regular patterns setting up. No one trades in the same way - we all have our nuances, preferences and personal likes and dislikes but you should have seen enough of the regularity as to how Dax trades by now to be getting a good feel for how I look at it and trade it.
But none of this is set in stone, you have to bring your own style to the party and adapt to what suits you best. I´m at my charts full time - its my job - but I know many cant do that. So you have to be more selective to suit your personal circumstances. If what I provide here helps and it chimes with you then that´s great. However, nothing here is prescriptive and everything I write and post can be adapted and moulded to personal requirements. Everyone does their own thing. However, I do think this is a great framework to build from:).
And btw - please let me know if any of this helps.
Dax40. 17 08 2022.
Pre Kick Off Notes
Still taking a lead from the US as they continue to test the upside. SPX tested the 200DMA yesterday so Dax still has this in its headlights. However its still some way off at 14480 ish on the cash index chart. The risk for Dax in getting there is that the US mkts will turn before as they are looking a bit over extended in their run up over the past couple of weeks. Dax being largely a follower would have difficulty in maintaining its upside rhythm if that were to be the case. We got a clean break over 800 yesterday and the measured move to 1400o just missed but still looks likely to reach 14000 and perhaps test above provided we get no surprises from the US. the chart continues to look constructive for more upside particularly to 14190 / 200 where we have a cash hole and gap on the index. H1 Levels doing their job exceptionally well over the past few days so no reason to think that wont continue.
As ever follow their lead, watch pa and hit your trades where the best odds lie :). FOMC mins this eve might trigger a mood change but I cant think what we dont already know so not expecting it but something to bear in mind. US Retail sales up before at 2.30 pm CET may also have some impact. Remember with Retail sales - its Headline for show and Core for dough :).
NB: the red dotted line in the chart noted as PCC is wrongly labeled. My bad should say cash gap - my bad apologies
Post RTH Session Review
Pretty easy right? You get short at the open and hold all day!! Well that´s the theory. I find trend days are either easy for some or exactly the opposite for others. They are not my favourite types of days as I much prefer the zone to zone action. But we did get a great set up to kick us off this morning. Right after the initial dip we had a pullback to 930 which was a cluster of the halfback fib, the open price and the pml. 3 reasons to short. I shorted it but only for a scalp so missed the majority of the days down shift. Someone asked me how I felt about that - any regrets? Sure some (no one like missing trend days lol) but its not a problem at all. I´m foremost a scalper so I stick to my plan and trade it. You should do what you are good at and feel comfortable with. Missed bags happen - and I´m pretty sure most traders don´t catch all trend days. The set ups are not as clear. Its easy to say "yeah I rode it for every penny" but in reality they are harder to trade imo. Easy to jump in on FOMO but when was that ever a good idea:).
That said there were some way points where you could have jumped in where broken S becomes R - but even these today were less clear cut than usual until they had happened and Harry Hindsight points them out to you. If you did get in at the top or anywhere down the fast drop curve great trading. There were 300 points on offer. But if you didn´t - or didn´t catch it all like me - don´t sweat it - there will be plenty more buses just around the corner tomorrow :)
Dax40. 18 08 2022.
Pre RTH Kick Off Notes
After yesterdays downtrend where we didn´t have much chance of jumping on board via flags, pullbacks or pennants etc. (as noted above) we have had very little pullback either in the tight range over night session. Its a similar picture in US mkts after some initial choppy volatility on the FOMC mins release which contained some relatively dovish comments but in reality signaled that the Fed were to stay on track with restrictive rate hikes. For today we might expect some consolidation which is usual after an expansion / trend day like yesterday. Whatever we get our levels are there to act as a guide and road map for where better odds trade set ups lie. Follow the pa read for today, watch for the usual set up patterns, 1st test levels, false and real breaks of levels and zones (S becomes R and vice versa), pullbacks etc. On the D1, 450 looks a good level to stem further downside moves and similarly 390 ish below that. ECB´s Schnabel on the wires this morning commenting that inflation concerns have not alleviated and that there is a possibility of "technical recession" in the Euro zone. Nothing to be really bullish about in that case but we are day traders and we wait for the set ups and act accordingly. Have a good one:)
Dax40. 19 08 2022.
Pre RTH Kick Off Notes
After retracing to halfback of the prior days drop price continued to test lower yesterday with no H1 close above 13740 which suggests any upside needs an hourly close above this level. Key levels to the downside we have the US CPI ignition point at 568 and below that 450 the D1 Double top level where we might expect a bounce. US equities are chopping around close to the highs made this week with no further test above key upside R levels which is clearly not providing Dax with any impetus to push higher over 800 at this time. Traders appear cautious of any further upside atm and look to be waiting for a positive catalyst.
It is Options Expiry today and I´m reading on Bloomberg that there about $2tr set to expire of which around $975bl are S&P linked contracts. I mention this because we could get a slow tempo into Dax expiry at 12.00 CET and perhaps a pick up afterwards. Its useful to know this but for practical day trading purposes I tend not to focus on it much if at all. Good info to have in mind but we need only to stick to our charts and read the pa which tells us all we need to know.
Nothing on the data front today.