DAX Xetra (cash index)
There are some significantly mixed signals on the DAX after a sharp bear candle aborted the recovery uptrend yesterday and the rebound has been scuppered.
Losing almost 200 ticks yesterday took the market back below a pivot around 12,284 and below the 23.6% Fibonacci retracement of the big 13,597/11,831 sell-off at 12,248.
This means that unless the bulls can reclaim these levels today the outlook will turn significantly more corrective again and the key lows could come back into view at 11,830.
The reaction to a big down day is always key and early in today’s session the market is just consolidating the sell-off.
There is though a concern that the momentum indicators have lost their recovery momentum (not surprising given the strength of yesterday’s selling) with the Stochastics crossing lower and the RSI falling over under 50.
The bulls will notice that the traded low yesterday bounced off the old downtrend which is a basis of support, and there will now be added focus on the low at 12,162.
Also, on the hourly chart there is also a move to unwind the RSI and MACD lines without them turning negatively configured yet.
This all adds to the importance of how the market responds today.
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