2024-04-16 - a daily price action after hour update - daxGood Evening and I hope you are well.
Today nothing moved the markets and I was humble enough to book some early profits and scalps before US open. I left it at that and am very happy with that decision. Days like this are the death for inexperienced traders, so if you lost money today, train on a paper account when market is this choppy. Leave your ego at the door if you think paper trading is above you.
Base thesis still stands, markets would have traded lower by now if bears could have done so. Market is looking for a reason to bounce and retest the highs or print a lower high. Obviously invalid if we see meaningful lower prices with follow through.
dax
bull case: Atrocious price action but bulls kept it above 18000, which was the bare minimum they had to do today. Avg daily range is somewhat above 180 over the last days and today was around 150 where we closed 70 points below the open. Tight trading range will a lot of fades. Did not help anyone to establish their bias. Bulls want to retest the open of the week 18200 and see if they can trade higher again. Daily 20ema is 18250 so this will be a magnet.
bear case: I have zero interest of being a bear at 18000 for now. Bears showed unbelievable strength on their first sign of life since late 2023-12 and this tight channel down is too tight for my comfort. Chances that we break below are very slim. That being said, bear channel is alive and well and the bull trend line from 2023-10 is broken, had it’s retest and is now gone for good. If you are still holding your longs because you have a “feeling” market will turn, I probably can’t help you. I won’t turn full bear until we see a better lower high or retest of the ath before we can form a proper broader channel downwards.
short term: Sideways to up - 10 Days where rips were sold and new lows were bought. Stick to what has worked until it clearly does not anymore.
medium-long term: After 10 consecutive green weeks, we finally printed two red ones. Bears are drooling. My long term outlook stays bearish and I expect at least a -20% correction in 2024. —changed -30 to -20% because price is moving higher while time is getting shorter for the target. Medium term is 17100 while I think we can touch the big bull trend line starting 2022-10 around 16700 in 2024. —unchanged
trade of the day: If you are not comfortable with tight trading range price action, train with a demo account until you are. Think of your training as athletes do.
