DAX – Rejection of gains suggests further downside

Forming a bearish head & shoulders

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  Technical

Monthly: Looks to be forming a bearish Ending Wedge pattern. A break of trend line support at 12280 and the measured move target is 8548. Rallies have stalled and found sellers near 12800 & 13200.

Weekly:  Looks to be forming a bearish Head and Shoulders pattern. A break of 11601 (neckline) is needed to confirm the pattern. The measured move would then be 9755. We posted a bearish Outside Week (often an indication that a top is in place) and this was followed by a confirmed double top formation. This week the rally has been sold into and looks to be forming a hanging man candle.

Daily: This weeks rally has rejected a move above the 12600 level and formed an evening star-type formation. Overnight has been sold into as we trade within this negative phase. Further downside is expected as we look to set shorts at current levels (12415) and on a rally at better risk/reward levels at 12550.

Action:

We look to Sell at 12415 and on a rally at 12550

Stop: 12650

Targets: 12115 & 11800

*UPDATE 05/09/2018 10:06:00 – 1st target reached

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Steve has traded and analysed financial markets for over 30 years. He started on the Baltic Exchange with Cargill Investor Services in 1987 trading Commodities. Following this Steve went on to work in a number of senior trading roles on LIFFE. From 1995, Steve then traded his own account, specializing in European Fixed Income markets. For many years he ran his own proprietary trading company, facilitating and educating traders. In 2012 he joined PIA-First and assisted in restructuring the company and help build it into one of the UK’s leading, award-winning independent research houses.

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Steve has traded and analysed financial markets for over 30 years. He started on the Baltic Exchange with Cargill Investor Services in 1987 trading Commodities. Following this Steve went on to work in a number of senior trading roles on LIFFE. From 1995, Steve then traded his own account, specializing in European Fixed Income markets. For many years he ran his own proprietary trading company, facilitating and educating traders. In 2012 he joined PIA-First and assisted in restructuring the company and help build it into one of the UK’s leading, award-winning independent research houses.

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