DAX Xetra (cash index)
After the huge sell off of the past week, there has been a minor rebound this morning, but for now, this move looks to be little more than noise within the sharp correction.
The acceleration in the move lower of the past few weeks has taken the market right back towards the key June low again at 12,104.
With an intraday bounce from 12,120 during yesterday’s sell-off, the market has ticked higher again today to leave the support so far intact.
However momentum indicators remain strongly corrective and also with further downside potential.
The MACD lines are gaining traction having just crossed lower below neutral, whilst the RSI is in the mid-30s.
Furthermore, considering the attempt to regain some risk appetite across markets today, the early rebound has been fairly tepid and does not suggest the bulls are especially confident to drive a recovery.
The reaction to a big bear candle is always important and there has been little to suggest any sustainable move higher this morning, currently looking to be little more than a dead cat bounce.
On the hourly chart, the inference on momentum is that a recovery is a move to unwind an oversold position.
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