Stock indices poised for more positive signals

Intermediate
  • A firm recovery tone has been seen across global stock markets since the end of last week, that continued into Wednesday’s release of the FOMC Meeting Minutes, from when the Fed cut rates in late July.
  • This positive price action has been a reflection of a lack of escalation on the trade war and if anything some tentatively positive signals from both the US and China, PLUS from the expectations of easier monetary policy globally.
  • Many of the major European and US equity averages are now poised to make more positive technical statements, to neutralise prior bearish signals from early August.
  • Here we focus on the German benchmark average, the DAX.

DAX risks still for an intermediate-term base above 11845

A firm rebounds Wednesday above 11758.5/760 resistances to reject Tuesday’s correction lower (to just prod below initial support at 11615 to 11609), reinforcing upside forces from Monday’s strong advance after Friday’s rebound, leaving intermediate-term bottoming pressures and keeping the threat to the upside Thursday.

We see an intermediate-term bear trend, BUT with growing risks for an intermediate-term switch to a neutral range above 11845.

For Today:                                                                                          

  • We see an upside bias for 11819; break here quickly aims for key 11845 and maybe towards 11900 and even 11989.
  • But below 11700 targets 11609 and maybe aims for 11530.

 Intermediate-term Outlook – Downside Risks: We see a downside risk for 11257.

  • Lower targets would 10859 and 10000.
  • What Changes This? Above 11845 shifts the intermediate-term outlook back to neutral; above 12260 is needed for an intermediate-term bull theme.

 4 Hour DAX Future Chart

4 hour DAX

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