DAX Context - 30/03/2015

The short term bull context from last week was proved to be right by today's price action. The index reached an ideal level for a wave B of (4). The fact that the an instrument reaches an ideal level doesn't mean that it should stop and reverse immediately. We have a very bullish period behind us and the bulls thought once again it was a buy the dip situation. As I was writing in the last couple of posts, I still anticipate that this rally should be a wave B. But this anticipation sure doesn't mean shorting the market right away. It only means that I should pay even closer attention for reversing signals. This is especially true during a wave B, because it can go up to a new high without voiding the wave count.

I'm gonna pay close attention to the parallel channel of the rally from last Thursday, because so far this channel looks like a corrective channel. The triangle in the middle has given us a good sign, especially after the test was completed, but the momentum on the 4 hours chart wasn't able to reach the sustainable bull zone yet.

4 hours chart with correction channels

The daily candle is a strong bullish candle and actually the market rallied from a pretty good place because it was a crossroads of the higher degree base channel, a bottom of a correction channel from ATH and the support of the MA10/20 channel.

Daily chart

So the momentum of the daily and above time frames - in my reading - is still bullish, while the 4 hours' is in the neutral zone, but the smaller time frames showed a small sign of reversal at the end of the day. The 1 hour chart is good example ofthat. But one little signal is not enough, especially if it is the last one of a trading day. I need to see 2 more things to start thinking about at least a correction: an impulsive break below the level of the preceding wave 4 and a pierce of the correction channel.

1 hour chart - last candle suggesting at least a small pause

Altogether I think it is early to trade long and aiming the ATH, but it is also to early to trade short for at least a correction of the rally from last Thursday. If the market will show the aforementioned signs of reversal, I still think it is going to be only a part of a correction: either a flat or a triangle pattern. The wave C of a flat could easily break last week's low, while a triangle must stay above that level and the wave C should terminate around the zone of 11800s.

Daily Dax - 30/03/15

18:27
I decided to close position at 12105.

17:19
Position is still alive. The rise is fragmented though. I can see potential in this long setup to hold it a little longer, and the market should go up to the 12150s ideally.

15:58 (GMT+1)
Break even and scale out at 12072. Trailing stop is on and tp is deleted.

14:46 (GMT+1)
I'm betting on the continuation of the bull for today.

m5-m15-h4

13:38 (GMT+1)
The RSI doesn't confirm the triangle pattern. It is gonna be either a flat or at least a temporary trend reversal within a higher degree correction.
 
13:20 (GMT+1)
May be another triangle pattern unfolding on the 15 minutes chart.

12:25 (GMT+1)
Position got stop out. Looking for another long setup.

10:45 (GMT+1)
I reentered the market on the long side. SL raised to 12030.5. I'm still anticipating that the market will reach higher prices today, but even if this is going to be a small degree wave (B) of (X), I am hoping that will have the chance to at least break even.

m5-m15-h4

10:35 (GMT+1)
Rest of my long got stop pit at 12030.

9:55 (GMT+1)
Systems are partially up an running. I'm still anticipating a wave B as part of a bigger triangle or a flat pattern. Tp set to 12148.5.

m5-m15-h4

9:48 (GMT+1)

Scale out at 12039. Sl is moved to break even.

9:42 (GMT+1)
Both of my systems are down. I can only follow the market on my cell.

9:36 (GMT+1)
Open long at 12008.5, SL: 11985

9:30 (GMT+1)

Unfortunately I couldn't hop on the long wagon after the triangle test was completed (morning meeting and a little technical difficulty with the internet).

Hopefully I can still find a setup to play out.