What’s inside:
- DAX price action muted in recent days, Deutsche deal still pending
- Currently trading at an upper parallel
- Day-trades in play, but risk/reward not favorable at this time for swing trades
The DAX continues to hold onto the Friday surge from critical long-term support in the form of a retest of the broken down-trend line running lower off the 2015 record highs. There is still no confirmed deal for Deutsche Bank, and while so, the market seems to be little concerned at this time the bank won’t have a substantially smaller settlement with the U.S. DoJ than the $14 billion originally on the table. But regardless of how the market is behaving now, as per usual we need to expect the unexpected.
There are intra-day trades to be taken in the DAX, but swing trades don’t hold good risk/reward at this juncture, even if the Deutsche situation wasn’t still pending. The chart is lacking any good indications, yet.
The monster bounce off support has brought the market into a top-side parallel once again this morning on a gap higher; it touched and pulled back from this line of resistance on Tuesday. We will keep an eye on its influence moving forward.
We’re still searching for clarity in direction from the DAX as we are across the spectrum of global indices. Keep an eye on the US markets, the S&P 500 is wedging and should soon lead to a breakout one way or another. There is almost certain to be pull on a sustained breakout.
Levels to keep in mind in the short-run: Resistance at 10646, 10705, then 10780/802. Support comes in by way of 10486, and then we have no meaningful level below there to lean on at this time.
DAX: Daily
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---Written by Paul Robinson, Market Analyst
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