- The DAX continues series of lower higher and lower lows
- Trading beneath lower parallel of channel
- Looking for the post-Brexit trend-line as a target
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On Wednesday, we looked at the DAX up close and made note of the lower highs, lower lows developing on the 60-minute time-frame. The market failed to push above resistance surrounding 10700 that day, then slipped back lower making good on continuing the series of lower highs and lower lows.
The short-term trend has been pointed lower within the confines of a channel dating back to the 11/14 high, but with the gap this morning it is now trading well below the lower parallel of the channel. On that we will look for the market to continue lower until meaningful support is met. Our eyes are focused on the trend-line rising up off the post-Brexit low as the next line of significance, which currently lies in the vicinity of ~10330/50. If that were to give way, then we would need to look to the 200-day MA, currently at 10197, then the 11/9 US presidential election gap-day low at 10175.
Given the current negative slant to the market, traders may want to look to stalling rallies on intra-day time-frames as potential opportunities for establishing shorts. The most solid line of resistance comes in on a retest of the bottom-side of the channel (~10475/85 as of now). A break back above wouldn’t immediately turn the trend around, but would be reason for caution on new short positions. As far as longs go, we have no interest until support is met and held with conviction.
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—Written by Paul Robinson, Market Analyst
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