This article is the beginning of reactivation of my regular analyses. Last year I wrote two articles about situation on market. Both of them were about DAX. Patient investors, who can draw conclusions, could earn really good money.
I’ll publish my analyses every two-three weeks.
But wait a minute, I’m playing on grounds of mechanic systems’ indications. I’ll make my analyses on grounds of charts from intervals D1 and W1. There aren’t so much information noise. The movements are ruled by technique, macroeconomic and political events, which I’m keen on. What is important? On the high interval like this, good occasions are only 2-5 times per year. But they are really good occasions. In my analyses, except fundamental analysis, I’ll use simple classical technical analysis and COT reports (size’s changes, mostly non-commercial).
In my opinion, those reports are useful only in investing in medium and long term, because only by those types of investing you can catch the important points in market. Investing on the ground of volumen’s changes or futures contracts on low intervals have minimum effectiveness. We can get similar effectiveness by using intuitive technique. If you want to keep abreast my new posts, sign up the list on the right or below.
Today, I’m going to continue DAX’s topic. To be honest, from 20th of December 2016, not much is happening on this instrument. We are in the 300 points consolidation. We also have consolidation on American indexes.
My instrument approach is currently expectant, with big tendency to growth. When I’m technically looking at weekly chart on DAX, I see growths with target amount 12 500 points (peaks on April 2016, about 750 points on high). Current consolidation is only momentary stop before new moving to high.
The situation looks similar on the daily chart. You can see everything in bigger scale:
And now: question for 100 points or maybe few thousands PLN: what must happened to make DAX move?
DAX needs strong tigger (factor which begins movement) to move on the north or on the south. 19th of January, the ECB meeting took place. Did this meeting disappoint the market? Did it eclict DAX’s fall? No. Every falls were eliminated on the next day. It evidences of power of market. It is important to remember that indexes are mostly moving higher and they are long and slow moves. But the falls are sharp, last very short, so it’s more difficult to earn on them.
So, what’s the best trading approach now, on this instrument on medium and long term? You should observe the market, which shows itself in which way it want to go and you should follow it.
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Mail: Robert (at) profittrader.pl
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