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DAX sells off within the range one more, but will it break?


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

 

The dichotomy between moves on Wall Street and those in Europe have been incredible in recent days, and the struggles on the DAX reflect this.

Whilst Wall Street has soared higher, DAX has dropped away within the recent consolidation.

DAX futures have been in a sideways band for almost three weeks now between 12,842/13,209.

However another failed move on the key near term resistance has seen futures swing lower again.

Yesterday’s doji was close to the bottom of the candle and reflects a bull failure, a failure that is continuing today.

A strong bear candle is forming and the market is falling back, to a one week low on an intraday basis below Tuesday’s low of 12,960.

  • The question is whether this now means a test of the range low once more at 12,843.

The support at 12,900 is first in line to be tested, but it is interesting that this range of recent weeks is littered with false and retracement moves.

Initial selling pressure this morning has pulled the market over 1% lower, however the Average True Range is 166 ticks and the market is already close to that.

  • Will this mean an intraday rebound around the support band 12,843/12,900?

Daily momentum has deteriorated as the market has dropped, but will need to continue the negative move to turn bearish.

Hourly indicators are also at levels where if the range if to continue, the bulls will be interested again.

Ultimately, until the outcome of US tax reform is known, a range is likely to continue.

  • Resistance is in the band 13,000/13,020 initially.

 


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