#202514 - priceactiontds - weekly update - dax futures

Good Evening and I hope you are well.

comment: By now you could likely be crash-news-fatigued and I get it. I keep it short and technical. My base assumption is that all markets are heading for their 50% retracements from the covid lows. If no bigger positive news will stop it, we will get there with the next leg down. For now market is tough since 20500 is close enough to expect 20000 but we could very well squeeze to 21500 before more down. Do not try to catch the knife here and wait for market to clearly stop the falling. Chart is clear, mark the levels and trade small.

current market cycle: bear trend

key levels: 20000 - 21500

bull case: Bulls are at big support with 20000 and the bull trend line from 2023-10. That bull trend line can be drawn many different ways and I just presented one possibility and you never know which algos respect what version the most until market has turned. I do think the selling is overdone very much and the short squeeze is around the corner. Targets above are the obvious ones. 21000 and then maybe 21500 but not much more for now.

Invalidation is below 19900.

bear case: Bears need to reduce risk and lock in some profits I think. I highly doubt market can go to 22000 but it’s not impossible and bears don’t want to see their windfall profits disappear again. The odds of continuing straight down after -10% are low. Very very low. Market could likely do some sideways first. Bears want 20000 and there I expect most to take big profits and a bigger bounce. My wave count is most likely off since I can not see this selling ending here above 20000. The covid low bull trend line is around 19500 and too obvious to not get hit over the next weeks.

Invalidation is above 21600.

short term: Neutral but I expect a big short squeeze next week. 21500 is my target for the bulls but most likely outcome for next days is chop between 20000 and 21000

medium-long term from 2024-03-16: Clear new bear trend and targets were given end of 2024. If this hits 19500, you buy with both hands stocks and etfs and do not look at them for months or years. Generational buying opportunity.

current swing trade: Out of most shorts. Next swing will be for W5 but I want an entry closer to 21500 or 22000 but 22000 is likely too much and we could not get there.

chart update: Big bear gap won’t stay open in that size. Big bear trend line above is the most important line on this chart besides the bull trend line from the covid low.