dax

German DAX Index

DAX

Update 28/02/2016

The most probable phasing for global indices is a recent 20 week low. There is an outside possibility that the recent bounce is the final 80 day in this current 18 month but the former phasing looks better to me. The chart below shows the near term picture in the DAX. I would not be suprised for price to move back up to the 40 week VTL (green) before forming a 20 week crest.

If it is an 80 day bounce the implication is for the 40 week to have formed back in July 2015. This also means the following 20 week cycle would be inverted so not ideal. Having looked at some of the other global markets I am more confident in a 20 week low here.

Update 18/09/2015

The ‘F’ category trade was very profitable as markets worldwide plummeted subsequent to the weak 40 day bounce described in the last post. The DAX was no exception and I am of the opinion that the top in May was a top of 9 year magnitude. This implies we have a few years of downward or sideways movement to come, interspersed of course with bear market rallies.

When the DAX moved up at the end of August I was anticipating another leg down in a H category. It seems the bearish pressure had caused a very short 80 day cycle to form at 50 days, using my original phasing of the 40 week placement in July. However, another scenario is possible here where the 40 week has actually just occured in late August. The chart below sets out that scenario. I am skeptical of this situation because of the 40 week length from the last 40 week in October, which is 45 weeks using this alternative phasing. Previously in the DAX since 2009 the 40 week cycle has oscillated around 37-41 weeks as the average.

Nonetheless trading was not affected. I did not take what is now considered to be the ‘A’ category interaction as I had anticipated a ‘G’ when the bounce came on the 24th of August. The ‘A’ interaction just met it’s target – the DAX being one of the weaker markets worldwide at the moment. However I did take the most recent interaction which was a ‘D’ short trade and it hit it’s T2 target today. I am watching this next move closely because in my opinion if the 40 day cycle moves hard down near to the 80 day low I believe the original phasing of the 40 week cycle will be correct and the next 80 day will also be a 20 week. If we see a stronger move up and new highs from the 40 day low (due late next week) the phasing with the 40 week at the end of August is more probable. Fun times.

Update 20/08/2015

Price moved out of the 40 week hitting a high of around 11800 before collapsing into what was a bearish ‘B’ category move. The subsequent ‘C’ category long was profitable, just exceeding it’s target to the upside. Then the bear has bitten. The ‘D’ category short exceeded it’s target and I am holding after what was an extremely weak bounce from the probable 40 day low centred around 10-12 August. I am fairly confident that this was the 40 day low using the principle of commonality while looking at other markets. The US markets are clear in that regard, all bouncing on the 12th (but missing the target to the upside). See the S&P 500 phasing for more detail.

Going forward in this particular 80 day cycle the next low is due early to mid Sept around the 10-15th mark. That date will become clearer in the next couple of weeks. If the 40 week placement is indeed correct then we are in for a bearish ride now down to the 18 month due March/April 2016. The 40 week low made early July was broken to the downside today. There is an outside chance that the 40 week is actually due at the finish of this current 80 day in September but I am staying with the current phasing for now. Trades are unaffected, of course!

GER30_£__daily_20_08_2015

Update 13/07/2015

Price moved up in an ‘A’ category interaction with the 20 day FLD in what is a highly probable bounce from the 40 week cycle low, occuring on Wednesday the 8th of July. We were expecting a bounce in this timezone and this is it. Price has broken the 80 day VTL too, indicating the low on the 8th must be at least a 20 week low and by inference a 40 week cycle low. Chart below gives the latest positions with the move up exceeding it’s T2 target as one would expect from a bounce of this magnitude. The target was around 11400 (tbc) and was a quick and profitable trade. The question is now how long will this 40 week stay above it’s low? A break below the trough within the first 80 day will be extremely bearish. I expect a break within the 2nd 80 day cycle to be more likely. Watch this space.

GER30_£__daily_13_07_2015

Update 30/06/2015

The rapid move downwards following some fundamental interaction over the weekend has made me think again in regards to the 40 week low. It rests on the 40 week FLD being broken. If it is I expect price to move downwards rapidly and make the low in the 2nd/3rd week of July. Of note also is the resistance from the 80 day VTL. This should have been broken if the trough that occured was the 40 week. It was not. From today I think there will be one more 20 day cycle until the low. The 20 day FLD projection target for this cross is 10415.

The only other possibility is that of an extremely bearish straddled 40 week trough which I am discounting for now. The move up in July will be telling.

These are interesting times..watch this space…GER30_£__daily_30_06_2015

Update 23/06/2015

The 40 week has occured worldwide in all major indices, in all probability. The 40 week FLD provided support in the DAX and price has rocketed out of the low. All eyes on this first 80 day cycle now.

GER30_£__daily_23_06_2015Update 16/06/2015

The question is whether the low on the 9th of June is a 40 day or 40 week? If it was a 40 week I would not have expected it to be broken so early to the downside. To that end I am expecting a short bounce out of a 10 day here and a collapse next week into a lower low 40 week cycle trough early July. A stronger move above the peak on the 11th of June will indicate that the 40 week has infact bottomed. Watch for support at the 40 week FLD (green line). If price slices right through that we could see some rapid bear action until early July to reach its T2 target.

GER30_£__daily_16_06_2015Update 08/06/2015

Price is moving nicely down into an imminent 40 day cycle low, due in the next few days. It is possibly the 40 week low but probabilities are low I believe and the more favourable option is the phasing outlined below with a major trough mid July. I will take this long ‘E’ category interaction with the 20 day FLD though but will watch it closely on a smaller trade size.

Update 31/05/2015

The main German stock index has been fairly hard to phase up to this point with a large degree of ‘fundamental interaction’ resulting in the bullish move we saw early this year. However using the principle of commonality we can begin to make sense of it, especially now price is moving in a more cyclical manner. The most likely scenario I think is set out in the chart below where the final 80 day cycle of a 40 week cycle is progressing. This does fit in with the view on the S&P 500 too. However I am watchful with an eye on mid June. That trough will either be a very bearish 40 day bounce or a very bullish 40 week bounce. If it is a strong move up I will conclude the trough of the last 80 day infact happened on the 26th of March.

There is a 20 week FLD target of around 10919, bringing price nicely down to the 40 week FLD below. That could act as support. If it breaks hard then the probabilities move towards the 40 week trough coming mid July. Shorts below the 80 (40) day low in early March could be wise for a profitable trade if you missed the 20 day FLD cross.

GER30_£__daily_31_05_2015

Leave a Reply

Your email address will not be published.