Daily Forecast - 01 August 2014
Dax September contract
Dax has performed exactly as predicted for weeks now as we stick with the developing bear trend. Yesterday we crashed through important support at 9485/80 after holding here in the morning session & got very close to our lower target of 9340. The monthly chart above shows how July has set the tone for August. Prices are oversold however in the short term of course. A recovery is not out of the question today therefore but the longer term outlook remains negative. Above 9390/9400 allows a move towards resistance at 9445/50, possibly 9470/75. If we continue higher look for a selling opportunity at 9490/9500. A good chance of a high for the day here but shorts need stops above 9535. On an unexpected break higher we could reach 9580/90.
The outlook remains negative longer term as stated & yesterday's price action signals this is only the start of a deeper correction. The 1 month bear trend is well established & a break lower today would not be a surprise. We should target good support at 9315/05. Just be aware that bear markets do get very sharp short term squeezes & if we bottom here today we need to be cautious of such an event. Yesterday was end of month, today is the weekly close & below 9300 keeps the market under pressure in to next week targeting 9276, 9235 & 9215/10.
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