NB: you can get all this prior to the Dax open each day by signing up as a site member see here The weekly summary below is useful post session information for educational purposes but having the levels, charts, daily trade plan and set ups BEFORE the kick off is where the money is made!
Dax40. Monday 31 10 22 Pre RTH Kick Off Notes
Overnight Range Small gap down in Futs - narrow range of 60 points or so. Data Euro Zone flash CPI at 10:00 UK. NB: Key data this week is US FOMC Weds Overview Last Friday we had another melt up day to end the week similar to the previous one. In the last 10 days Dax has moved up + 800 points and @1500 points since bottoming around 11800. SPX has put in a similar performance. The ultimate target for Dax is around 13570 the Sept 13 high print. The main driver of this rally is largely down to traders focusing on a perceived Fed "pivot" where a dial back in forward rate rises is expected after this weeks anticipated 75bps print. For Dax the language at last weeks ECB also was largely taken as more dovish than expected. The end result is that traders / investors are perhaps thinking we are at a turning point in the fight against inflation and restrictive rate rises are possibly coming to and end. We are still going to be raising rates but at a lower pace. Whether the fight against inflation is at a turning point is still not clear as the Fed need to see clear data suggesting this is the case. Last Fridays PCE printed in line with expectations which was taken as better than it could have been and jumped on. The press conference on Weds FOMC will be eagerly digested for clues as to whats coming next. This week is all about the FOMC. From a technical perspective on Dax we have pushed up and through the descending TL on the D1 which has been in place since the start of the year. As this is a HTF indicator it could spend some time deciding whether to establish this break and push higher or hold for a pullback. "Dovish" language from the Fed on Weds could be the catalyst. We are clearly in bullish rally mode atm and until we are clearly not on the H1 we need to be looking for long opportunity at good S. Todays Trade Plan Whilst Dax has continued to push up, todays CPI reading could be important at least until Weds. We have pushed up solidly from Fridays low at 13050 so it would be logical to expect some pullback this morning as we are (as I write) above Fridays pcc at 13243 so inventory correction could be the first usual thing to expect slightly above our S1 zone at the RTH open. Holding S1 would suggest we are still primed for higher up to our eventual target at around 13570.
I will watch pa at S1 for signs of holding and take a long position if this plays out. If not and it breaks I will take a short on any break and pullback from the underside.
I will short Fridays afterhours close at 13365 in R1 on a 1st test.
I have a limit buy at S2 and S3 but will be quick to change direction / pull if pa indicates..
I will be watching for regular scalp set ups from reference levels and patterns such as the open level price, pmh & pml, double tops and bottoms and "shelf and roof" type entries. gap close etc.
As ever I will be following pa and market generated information (MGI) for any opportunities. Levels S1 - 13215 - 13235 S2 - 13060 - 13080 S3 - 12985 - 13005 R1 - 13360 - 13380 R2 - 13450 - 13475 R3 - 13550 - 13570 The US
Very clear levels on S&P as we start the week which is dominated by Weds FOMC. after the strong up push we could expect a bit of cooling off especially as the week pivots around the Fed midweek. The dowside is pretty clear and covered by support levels and zones. To make further progress S&P need to reclaim 3900 for the next leg. I will watch at the levels and will have a resting order at 3812 should we get down there during the session. RTH Post Session Review
Not much to do today on the last day of the month. Dax held S1 all day with a potential fade entry just after the open with M5 RSI divergence. Apart from that there was only one regular scalp entry from the open level price for a short fade. Poor pa day for opportunities - we move on :) Dax40. Tuesday 1 11 2022. Pre RTH Kick Off Notes
Overnight Range Futs gap up remains open at around 12270 CFDs.. Around 100 pts push upwards in overnight session with no pullback. PCC is 12253 currently as I write @125 pts below price. Data nothing of importance scheduled in Europe. ISM manufacturing pmi and Jolts job opening in US at 14:00UK. Overview The rally continued overnight up to yesterdays R1 for Dax. S&P continued up from the 3860 level I mentioned yesterday. For now this upwards move in equity prices is firmly in tact. The FOMC tomorrow will be the catalyst as to whether we continue in the same vein or pullback. More on this tomorrow. The D1 target for Dax in this leg is around 13570 with the 13450 zone en route. I suspect this move is catching a number of participants on the wrong side given the generally poor earnings particularly from the tech sector last week and stops are fueling this momentum. Whether or not that is the case we just follow what we see. I wrote yesterday that until the trend is clearly not continuing upwards, that's what we should be looking to trade. Long at good support if we get the opportunity i.e. btd mode. Todays Trade Plan As I write we are at resistance with a futs gap still open behind us and around 120 pts above pcc. Moreover this push has come in the overnight session which we know has a tendency to be retraced once the RTH opens.
Therefore my first thought for the open is that we short R1 looking for some inventory correction move. If we pullback before the open then obviously this maybe invalid - depends how far we pullback as a quick move up to wick out the top of the overnight range could be a good short entry at the open.
I will look to go long from S1 zone on the back of the BTD idea.
Any RTH sustained move above R1 I will look for pullbacks to the zone from above to go long
As always I will be watching for regular scalp entries at ref levels (e.g. pmh & pml, gap close, open level, dbl tops and bottoms etc.)
I have left the levels the same for today as nothing much changed in the RTH yesterday.
Note this is the 1st day of the month and can sometimes spark a fair degree of movement.
Levels S1 - 13214 - 13235 S2 - 13060 - 13080 S3 - 12985 - 13005 R1 - 13360 - 13380 R2 - 13450 - 13475 R3 - 13550 - 13570 (note the 13525 level also) The US
S&P futures continued to push up this morning. Pre FOMC rally ? Clearly the Fed "pivot" is established in traders minds but everything rests on the FOMC tomorrow. For today we have clear levels upside and downside. Any pullbacks to levels are decent opportunities on the way to 3920 and 3953 the next two targets above. a break below 3864 the buy level from yesterday could see further declines. Atm we are in BTD mode as in Dax. RTH Post Session Review
Not a great deal of action. 1st trade idea of short at open at R1 looking for inventory correction was a loser. 2nd trade pullback to zone, again from above trade plan, was a winner. 3rd trade was a pullback scalp on US data and fade of pmh. That's about it - not much to write home about :). Dax40. Weds 02 11 2022. Pre RTH Kick Off Notes
Overnight Range Price continued to melt up from mid afternoon yesterday - range is narrow currently 50 or so points above pcc. Data As if you didn't know - FOMC this eve. Overview Today is all down to the Fed rate announcement and subsequent press conference. There is a great deal of expectation on the Fed giving some indication that they are thinking of dialing back on the restrictive rate hike path going forward "the Fed pivot". Today it is expected there will be a 75bps rise and in Dec a lower 50bps rise with perhaps 25bps rises in the early new year. Whether this transpires is yet to be clarified and ears and eyes will be on the language accompanying the announcement and on what Powell says at the press conference. It seems pretty straightforward for what happens next. Powell does indeed indicate a stepping back in the rates path then indices are likely to continue their upward trajectory. If he gives no indication of this we may see a reversal. If he specifically indicates the opposite then we see a fall. As always on these major announcements its important to watch out for traps on any initial move. Better to wait till the dust settles tomorrow for Dax and trade what we see then. Consequently with so much resting on the news and data later in the day we could be in for a consolidation / ranging day for Dax where our levels and zones are the best way markers we have. Todays Trade Plan Given the above my expectation is for zone to zone trading. I have no limits set atm and will watch pa from the open to guide me. When I don't know I am quite happy to say so. There is no point in saying otherwise. The usual plan on such days is to take any early set ups and be more cautious in the lead up to the data in the later afternoon US session. Watch out for regular scalp opportunities and use the zones for entries as they offer far better odds as always. This rally has been strong of late and we are in a seasonally bullish time of the year so there is some "wind" behind this move. The logical conclusion for Dax should we move up is 13550 - 13575 the Sept 12 high print with the cash 200DMA around 13660. Should we reverse we have come a long way since the 11800 bottom on the 13th Oct so it could be fast back down, the old saying "up the escalator down the elevator". Levels S1 - 13214 - 13235 S2 - 13060 - 13080 S3 - 12985 - 13005 R1 - 13445 - 13475 R2 - 13550 - 13570 R3 - 13615 - 13636 The US
As noted above everything rests with the FOMC later today. The market is expecting some form of Fed "pivot" once the data is released with accompanying information. Since the Nick Timiraos WSJ article of a couple of weeks ago the market has formed a view that once todays highly anticipated 75bps rate rise is done, the next in Dec will be lower at 50bps with the likelihood of subsequent hikes of the same or lower into the new year until the terminal rate is reached. In a simple world this would be result in a binary outcome for indices. If the so called pivot is confirmed by Powell in his opening remarks and or during the Q & A stocks should rally. If he explicitly omits to suggest this is the case, stocks will likely fall. However we don't live in such a world and what we might get is a restatement that the Fed will follow the data and act accordingly. I have a feeling that Powell may shy away from any explicit wording that states that from here on in they will ease the pace of rate hikes. Anyway - who cares what I think, we have the Man on the wires soon enough. From our perspective we need to watch out for any traps on the announcement (the S&P has form in running one way then the other on the announcement) so its best to let the dust settle before committing any hard earned capital. We have clear levels both to the upside and lower down the chart and as ever they should be watched for entries either way. Good luck :) RTH Post Session Review No wrap up this eve due to FOMC. Dax40. Thurs 03 11 2022. Pre RTH Kick Off Notes
Overnight Range Futs gap down - now filled. As I write we are @100 below pcc and have a range roughly between 13100 and 13200. Data Lagarde speaking at 08:05 UK, and US ISM Services at 14:00 Overview Rather than me writing out the same FOMC summary that everyone else has I thought I´d use one that was already made! See Wells Fargo analysis below. I´m all in favour of saving time at this time in the morning :).
The above seems to be a general consensus of Powell's comments at the press conference along with the rate statement published on the announcement. So we got some indication of the pivot on everyone's mind and it does seem the pace of hikes should come down in future possibly as soon as the Dec mtg. However the overall tone of Powell's comments seemed to be rather more hawkish than expected. The terminal rate, he said, will likely be higher and space for a soft landing is "narrowing". Mixed bag then for traders and investors to digest. After an initial push on the announcement and statement prices started to pullback during the presser and continued to soften into the close. Spx closed at 3759 with 3730 next downside S - a key level that needs to hold for any further attempt at a rally. One thing to bear in mind is that we could see further volatility today in S&P as we did in May and June where the next day reversed the announcement day move. We may also have had a bit of "buy the rumour sell the fact" - we will see soon enough. Todays Trade Plan Dax came back through the Trend Line last night which has held the upside all year on the HTF D1 and is currently sitting right on it as I write. This could be a key pivot. If we move back above after testing it and close above today we could be looking at a further push higher. If we close below - possible more downside to come - we will have to wait for todays close for this HTF indicator. Todays is all about whether we get any follow through from the initial FOMC reaction. We may have to wait for the US session to answer that question. For today prior to the US session the clear opportunities for me are:
Sell a 1st test of R1 / gap close at pcc / halfback of the Fomc move in the RTH. Good confluence here.
Look to buy a 1st test in the RTH of S1 around 13050. NB: if we move cleanly below I will be watching S2 and the HTF level at 12950 and will be looking to buy 12950.
Depending on what pa we get we get around these zones I will be watching for pullback opps to get on board the direction.
Additionally I will be looking for regular scalp set ups as always (gap close, pmh & pml, open level etc.)
Levels S1 - 13050 - 13075 S2 - 12985 - 13005 S3 - 12800 - 12825 NB: watch 12940 - 50 on the D1 R1 - 13230 - 13255 R2 - 13453 - 13474 R3 - 13523 - 13551 The US
Post Fomc day. A continuation of the rally looks unlikely given the futures pa but I have an open mind. Clear downside levels and above. Thinking 3702 breaks could sell down to 3635. Really needs to break above 3766 to start to push higher. If it cant the path of least resistance is lower. RTH Post Session Review
Dax Scalping day. Some opportunities both ways but nothing to write home about. See annotated chart above. Re S&P 3702 held as pointed out above and good enough for 40 / 50 points up to the overnight low. No reverse Fomc day action. Powell sounded too hawkish imo. Dax40. Friday 04 11 2022. Pre RTH Kick Off Notes
Overnight Range Circa 100 pt range from around 13100 taking out yesterdays highs and currently above pcc by around 80 points as I write. Data NFP 12:30 UK. Overview No post FOMC day rally and Powell's hawkish tone has seemingly set the market on edge with his comments on higher terminal rates and the whatever it takes rhetoric on fighting inflation. Dax will find it tough to move up without the US providing the impetus. Today we have NFP yet another piece of key data for participants to digest which will likely trigger another bout of volatility on the release. While the last quarter of the year is usually seasonally bullish the back drop is highly uncertain given central banks universal determination to stave off rampant inflation. Talk of recession is gathering pace in all economies which is unlikely to help sentiment push prices higher. We are still in a general bear market and rallies are going to be hard fought if they are to be sustained. For today we need to be on the look out for early session opportunities in Dax prior to the NFP data which will no doubt spike around and set the tone for the US session. A strong print will do nothing to dispel Fed concerns that the US labour market is still running too hot. Todays Trade Plan Dax closed yesterday just about on the yearly TL we have been watching - so clean break below or above - it remains a key HTF level to watch. My plan for today as on all key data releases is to look for opportunities in the first couple of hours as we are likely to consolidate in the run up to the data when things could get volatile. As we are above pcc look for inventory correction from the open. Yesterday we had a spring from below our S1 zone and price has continued to push up in the overnight session. While we are still digesting the FOMC comments and given NFP today I will focus on zone to zone trading opps prior to the US session.
As we didn't fill Weds pcc we still have a cash gap up at 13256 just above R1 together with the halfback of the leg high point and yesterdays low in the R1 zone. We still have good confluence here so I will be looking for 1st test fades in this area.
Any move down to S1 would be a good 1st test fade opp as it would also be a clean H1 double bottom.
I will buy any move down to the HTF level of 12950.
I will also be looking out for breaks and false breaks at these levels.
As ever watch for regular scalp opps as pa evolves.
Levels S1 - 13000 - 13025 S2 - 12800 - 12825 S3 - 12745 - 12765 R1 - 13230 - 13255 R2 - 13337 - 13363 R3 - 13420 - 13445 The US
Levels are the same as yesterday. We had a bounce from 3700 although not a particularly convincing one and this level is key to hold today. It breaks below 3667 is next key level. It holds 3766 above is 1st target for an attempt to retrace the Fomc move down. RTH Post Session Review I am sorry but I had to deal with a family medical emergency late Friday hence no wrap up review. On The Level: Daily Trade Plans & Set Ups