Matt Simpson, CFTe, MSTA
CityIndex
We did indeed witness the swing lows on several European Indices which favours 'buy the dip' strategies on intraday timeframes.
Sentiment has changed leading up to the Scottish Referendum with traders positioning themselves for a NO vote.
With European markets closed and Asia session being a very much 'risk-on' environment as Scotland appears increasingly likely to vote NO, we do risk a gap up at market open from global stocks. However this may also mean we see break-away gaps (which don't close) and can seek trend continuation patterns on lower timeframes.
Of course if we do see the gaps close then this too may provide opportunities to buy any dips.
We just need the risk-on sentiment to continue throughout European trading, which I suspect is a more likely scenario.
DAX appears poised to retest the 10k highs and target 10,200. Alternative markets to consider are CAC and Euro Stoxx 50 which exhibit similar technical patterns.
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