US and Euro stocks mounting one more rally before crashing?

Looks like you might be right. It's struggling to do anything atm, so it'll take a late surge I think if it is going to break above the current level.

You can see how the Dax is trapped atm between very strong resistance above around 11,000, and the H1 200ema.

The H6 chart shows a projection of what I think might happen as the price moves into a moving average/trend line apex, namely a break down to the south. This correlates pretty well with US equities which are now entering a critical technical level which may see a resumption of the bear market within the coming few days or so, stress being on MAY, because no one can be certain.

So far so good. Bull trap above the open. I'm short from 12 points above with stop at BE. Let's how it goes.

The gap between where Dow and S&P were when I made my last post, and where they are now, has been filled, and although the price broke well through 400 ( my predicted top level for today as posted above ) up to 482, it was a news spike and the market closed off its highs at 370. So, can equities build on this tomorrow, or are they going to come down. This we will have to wait and see.

I was just watching Bloomberg, and it's amazing just how much they are talking up the markets. The US economy is super strong; equities are now set for new highs following this correction; two or three more rate hikes are on the way this year, albeit market dependent, but no one, not one single person sees the markets going lower. Of course they may be right, but who was calling the markets lower in January 2008? Very few!

So often, we see a bull or bear run, however small the time frame, finish with a very powerful movement, I trade the Dax and I see it every day, it is something I am always looking out for.

Tomorrow will be interesting.

One point I would like to make. today I had a short exchange with some trader here on ff who reckoned that the current good performance of sterling against the dollar and the euro is all due to Brexit, with the logic that this is a pure reflection of an up and coming soft Brexit or no Brexit, which the market is liking and therefore sending the pound higher. No, I said, it has got nothing to do with Brexit, it is a technical move, if it was Brexit dependent it would be going anywhere because neither is Brexit, at present. Now I welcome different points of view, but you've got to give ignorance where ignorance is due, and to say that price movement has nothing to do with technicals, is pretty ignorant in my book. I told him that I called the bottom on GU weeks ago, a bottom which has since held, but no, to this trader, technicals are redundant on GB pairs at the moment, it is all Brexit driven, and any rise in the value of Sterling is because markets know we are headed for a soft Brexit. I also don't need to tell you that this particular trader, who I've encountered before, is an ardent remainer!

The moral of the story is that technicals matter, they matter a great deal, in fact, for day traders, they are everything.

Dax showing real bullishness this morning, and Dow futures unmoved from last night's close. What's really significant, is that the 11,000 level on Dax has been broken, which leaves it free now to move to a much higher level. Just above though is the 61.8% taken from the Dec 3rd high, and as it sits on top of today's R2 pivot @ 074, this could be a tough resistance level.

Yes it looks super strong, but I can't help thinking that Dax could turn really quickly, the pa indicates as much, and I do not trust these levels.

I don't think anyone could have predicted this ballistic move on the Dax from yesterdays London open, not me for sure, especially today's move, but, it is taking the Dow further into my potential turn around zone, now above the 61.8% and headed for the 76.4% and 25,000.

Are equities going to carry on flying north to new highs, because that's what a lot of people are now thinking, or, are the doomsayers like myself, going to be proven right? It is an intriguing question.

This deadcat bounce seems newer ending, to many people expects it to drop including my self.. Maybe that was just a correction and the train have left. Stock market doesnt care about economics and is not as correlatet as people think. To many doom prepers posting in social media and this thing keeps climbing.
They will not let a crash happen.

Buy the dips is on..

If it plummet again it will, when retail turns bullish.

I was expecting dow under 20K and wanted that oportunity of a life time to buy low and now this.

I hope after this post it will crash just to prove me wrong

one thing is that it climbs on low volume, and it did that also before the crash/correction last year.

And who could have foreseen that the real momentum behind this rally would begin at 6pm (UK) on Boxing day and take the Dow up 1250 pips by the end of the day. Obviously Mr Market doesn't fall asleep in front of the telly like everyone else on Boxing day.

Well, so far at least, it is doing what I expected it to do, with the Dow only having just entered into my critical zone. It is still very much in the pullback territory of a bear market. Only if the Dow begins to climb above 25,000 will I begin scratching me head. The Dax daily has loads more room to move to the upside now that 11,000 has been broken, my next solid looking resistance level being 11,500, but with the Dow now only 500 pips short of 25,000, I'm beginning to wonder. There has to be a catalyst to turn these markets somewhere within this critical technical zone of mine, so we are very likely looking at something which will drive the markets down again some time before the end of the month.

I have a layer of resistance on Dax right here at 11251 and 11307 @ the 100MAs on Daily. However, I think it wants higher, as the Dow will push it higher.

Dow has past the 100ema on Daily, and it looks poised for 100sma on Daily at least today (24881). The 200sma on Daily the most likely target at 25075 for potential reversal. However, I think we have put in the low's for a while.

67,4% just above at 262. It's on steroids today.

Remember 2008, to which I have compared what is happening today. After the January dead cat bounce off the lows, there was a five month period where the markets rose and fell, pretty much moving sideways, until May, when the big falls began again. Now I'm not saying that we can expect the same thing to happen, but as I demonstrated above, the 2 day charts are remarkable similar between now and then. The big difference however is to be sen clearly in the monthly charts, which today on the Dow and S&P are still showing bullish potential. In 2008, this was not so, my moving averages were in their most bearish configuration, and this is the one area of doubt I have that we are in for a major stock market crash this year.

The funny thing with todays big green candle, is that the market now have its persuasion to make retail trader go long on every little dip instead of short , and before one knows we are in a downtrend trying to catch the bottom.

Thats is the psychology of markets, and I often fall in that trap.

Anyways, I will start to look for some shorts around these levels we are now.

Happy trading and have a nice weekend.

We have just seen, the biggest single four working week rise in the Dow Jones and S&P 500 in stock market history, or at least back as far as my charts go which is 1970, maybe not % wise, but certainly in pips. It has been an incredible rally by any standards.

I have my zone of truth, with my upper limit being 25,000 on the Dow, but, looking at the strength of the buying, I think that it can rise higher, of course it can, we all know that, anything can keep rising, but NOT to new highs. 26,000 looks possible, even a bit higher by 2-300 pips.

Of course, the higher this rally goes, the more interesting it gets, and if truth be known, I would love to see new highs in equities, they can blast to the moon as far as I'm concerned, rock on 30,000, why not! If the Fed lay off the rate hikes, the trade deal with China is sorted out and favourable for the US, and if the economic data remains solid, then why the hell not. But, technically, on the weekly chart, it is not on, though on the monthly, it is. 25,000 on the Dow is a big level, and if it breaks, 26,000 is even bigger.

I will keep this thread alive as long as the prices stay beneath the October 2018 highs, but once these are decisively broken, i'll admit defeat.

Yeah, just hold on to that losing mindset - you'll go far my friend

So tell us about a winning mindset, please.

Just trust your instincts. That's all

Just hold onto those instincts - you'll go far my friend!

Food for weekend thought from some professionals:


http://www.fasanara.com/outlook-11012019


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