What a beautiful maneuver in DAX again. The market maker definitely worth a round of applause that they were able to convince a boat load of retail investors that the DAX is going to make a new high very soon (including me). This group of hopeful pullbacks buyers are all trapped. Some of them have already puked. Yesterday around 12850 I have seen a stop of of 80 contracts being puked and absorbed by the market maker. He who has puke would be grateful that he has puke around 12850 because now DAX is trading around 12650. Do the math how much more paper loss he is going to inflict if he choose to stay on.
Given the pullback buying speculative long position built from 12950 to around 12800, the market maker has no interest in giving them a refund (break even exit) by trading up to in the vicinity of that level. The path of least resistance is to trade lower to probe the stops behind the 12600 low, where even more inventories will be puked. Now the situation is a typical DAX one, it has to go down first to clean the book before it can go up. Brace for impact, traders!
Given the pullback buying speculative long position built from 12950 to around 12800, the market maker has no interest in giving them a refund (break even exit) by trading up to in the vicinity of that level. The path of least resistance is to trade lower to probe the stops behind the 12600 low, where even more inventories will be puked. Now the situation is a typical DAX one, it has to go down first to clean the book before it can go up. Brace for impact, traders!
1