Stock averages still trying to form better bases and recoveries

Intermediate
  • Global equity indices are continuing to prove resilient this week after the aggressive selloff seen at the start of August last week and again on Monday this week.
  • The moves lower have been driven by global growth concerns in the wake of an escalation in trade war tensions between the US and China.
  • The solid consolidation activity seen since Tuesday across global stock averages, however, highlights possible bottoming efforts and leaves the immediate risks for upside activity into the end of this week.
  • This positive tone has been bolstered overnight Wednesday/ Thursday by better than anticipated Chinese trade data.
  • Here we spotlight the German benchmark share index, the DAX.

DAX bottoming effort and rebound risks intact

An erratic consolidation theme Wednesday between 11741 resistance and 11536 support after Tuesday’s rebound up to 11741 eased the bear tone from Monday’s plunge through multiple supports, and whilst holding above 11536 we see a base effort and immediate threat back to the upside Thursday.

We see an intermediate-term bear trend.

For Today:                                                                                          

  • We see an upside bias for 11741 and 11791; break here aims towards 11900.
  • But below 11644.5 opens risk down to 11606.5, then for 11536.

 Intermediate-term Outlook – Downside Risks: We see a downside risk for 11423.

  • Lower targets would be 11271 and 10859.
  • What Changes This? Above 12260 shifts the intermediate-term outlook back to neutral; above 12466 is needed for an intermediate-term bull theme.

 4 Hour DAX Future Chart

4 Hour Dax Future 2019-08-08

Editor in chief

Steve Miley has 29 years of financial market experience and as a seasoned expert now has many responsibilities. He is the founder, Director and Primary Analyst at The Market Chartist, the Editor-in...continued

Comments on this analysis

Your email address will not be published. Required fields are marked *


Latest Related News

European (and global) stock averages surge – DAX Forecast

Last week’s “risk on” theme has been reinforced already this week, despite the UK and US markets being closed Monday, with Asian and European stock averages surging to new cycle highs in many instances, reinforcing the positive theme we highlighted in last week’s report.This positive outlook continues to be driven by hopes of a COVID-19 vaccine alongside the further unlocking of the global economy from… Continued

European (and global) stock averages aim still higher (DAX Forecast)

This week’s “risk on” theme remains intact with global stock averages building on the strong gains from earlier this week, probing up to recent peaks over the past 24 hours.The negative topping patterns from mid-May have been further rejected, with the April cycle peaks in the crosshairs.This positive theme was driven by hopes of a COVID-19 vaccine (somewhat dented), alongside agreements on a European recovery.Here… Continued

German DAX Taking A Corrective Break – Elliott wave analysis

German DAX made a five-wave recovery from March lows and found a temporary top at 11240 level. We know that after a five-wave move, a temporary three-wave pullback may start developing. We already see a three-wave decline; however, price may still decline further into a wave C before, real bulls take over. Possible support can be at 10150 level, or lower at the 9670/9300 zone,… Continued

Stocks setback, but looking for a bounce – DAX Forecast

A shift towards a “risk off” theme Tuesday, with US stock averages staging a late selloff and “risk” currencies dipping lower.There was no real catalyst for this move, with shares indices trying to stage rebounds ahead of the European stock market openings on Wednesday.A key focus today will be a speech by Fed Chairman Powell.Here we look at the rebound bias for the future on… Continued

Still looking for a further stock rebound (DAX forecast)

A we highlighted in our report last Friday Looking for a stock index rebound (S&P 500 forecast), a further move to a “risk off” phase to start this week, with stock indices gapping lower Monday, particularly in Europe with many markets closed for national holidays on Friday. This has been primarily driven by negative comments from US government officials, including President Trump regarding China and potential… Continued

Forex Brokers in your location