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1. Cac has reclaim back the broken neckline and is on the verge of breaking the down trend line formed by several key highs of last week. This development spins the formation to the bullish side that we could see it as a bull flag formation.
A decisive break of that formation would put the 4780 and 4960 levels on cards. This is going to put pressure on the bears, but still would not change the bearish structure.
2. Dax has successfully defended the key neckline support at 780 yesterday, standing firmly above 950 is going to open doors to more short squeeze into the 61.8 fib or higher of the whole December decline.
Can you help answer these questions from other members on NexusFi?
1. A failed breakout in DAX. The break merely pokes through the prior high to run stops. No real buying. Given the depth of the retracement, it is screaming bearishness to me -- The range at the top is a distribution range.
2. ES has been coiling below 2600 resistance for several days already without signs of break out or break down. My base case is still for it to poke through the high towards 2620 - 2630 area to run stops before rolling over. So long as the bounce are kept below 2700, I would not shift my bearish bias.
3. The landscape in Nasdaq is very similar to that of ES. I would expect the measured move target being achieved at 6650 level, where major fib, broken neckline resistance all come together. The coiling before the major level is deliberately manufactured by the market maker to build energy for bullish continuation without attracting too much selling pressure. However, merely 1 week of consolidation is by far not enough to break through the resistance built above 6600.
1. Market has been in the chop of this consolidation range for a week now. The break down has been bought/rejected and the bullishness in US equity failed to lift Cac above this consolidation range. Due to this level of divergence against its US counterpart, we maintain our bearish bias to Cac and European equity as a whole. The bull bear line in the sand is yesterday's low at 4755. If that one would be taken out, the bearish rotation is going to start with full force.
2. The pattern of bearish consolidation is similar in DAX. All eyes are on the 10800 level for a start of the bearish assault. Before that level being resolved decisively, chopping around is the going to be an inevitable fact of reality.
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1. Nasdaq had a proper break yesterday and also touched measured move target and the broken neckline. We are not in a hurry to short it as it still has some bullish momentum left after the break out. Now the bull bear line in the sand is the Monday low at 6625. Usually it is when a bullish pattern fails, a bearish rotation starts. The break back into the range it has broken out of could be a warning sign. The decisive moment is when the bullish initiation point being taken out.
In the meantime, an alternative strategy is to short the European equities in the US session when it moves in sympathy to the US indices.
2. ES had a proper break of the 4 day range. It has bring 2625 and 2635 key resistance level in play today. I would try short a small position at that level to test the market.
What do you think can the Nasdaq 100 rise to its highest level ever before it starts to fall or is there some downward correction going on here? What could be the maximum level of today's Nasdaq index and how could it go down? Is it possible that the December bases are being sought at this stage. Many questions, but I do not have any information about where we are now on the road.
ES is building value/volume just before the 2625 resistance. This has ruled out the short entry at 25. A short squeeze is likely to pop through that level decisively.
1. DAX is still in the weekly range. After a bearish open, it is trading below yesterday's value, hence overhead supply from 11875 level onwards. The weekly high volume node at 11820 should be a good location for rotation. After that the bear is likely to target the double bottom weak structure at 11780.
2. Cac had a compressed range yesterday. A gap open below it would create overhead supply. It is trading within Tuesday's value, a value area trading rule applies that it is likely to take out the VAL at 4760 as the destination of this trade.
Russell has tagged the VPOC of Dec monthly volume profile. The reaction is shown. It would not be easy to trade through such a big volume node. At least, it would have to consolidate to digest the trapped volume.
