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DAX comes under further selling pressure with rallies being sold


DAX futures (Dec 2017 contract is FDXZ7, continuation contract is FDXc1)

 

The reaction of the market yesterday shows that there is now a decisive correction underway.

It had looked as though support had been forming but the bulls subsequently used that support as a chance to sell.

This selling pressure has continued today and intraday rallies now need to be seen as an opportunity to once more sell.

Momentum indicators are decisively corrective now with the RSI falling to 40, MACD lines accelerating and Stochastics increasingly negative configured.

There is also further downside potential in the moves of the momentum indicators.

  • The support at 12,900 is now a key level that needs to be watched as a breach would open the next basis of support at 12,655.
  • The 38.2% Fibonacci retracement of the 11,865/13,533 rally is also at 12,895 with the 50% Fib level at 12,699.
  • On the hourly chart initial resistance is at 12,992.

It is also noticeable that the hourly RSI is failing at 40/50 now with the hourly MACD lines negatively configured under neutral.

  • Key resistance is now building at 13,090/13,135.

 


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