- The global financial markets “risk on” theme has been damaged since last Thursday’s selloffs across global stock indices.
- Despite Friday rebounds, Monday has seen a renewal of negative forces attempting to resume the larger bear theme from September.
- “Risk off” is being driven by:
- Fading hopes of a US economic relief package before the US elections
- Surging COVOD-19 cases across Europe
- More aggressive lockdown measures throughout Europe
- Risks of no trade deal between the UK and EU
- Here we look at the German and pan-European benchmark averages, the DAX and the EURO STOXX 50.
DAX day trade outlook: Negative bias resumes
Day trade update and view
A Friday-Monday rebound above 12850/860 and 12949/951 resistances, to then stall below 13052.5 at 13018 and then to significantly sell-off below 12800/780 supports to resume negative forces from last Thursday’s plunge through multiple supports, to keep the threat to the downside Tuesday.
Day trade setup
- We see a downside bias for 12708.5/691; a break here aims for 12581.5 and 12521 lows, possibly towards 12400/390.
- But above 12886 opens risk up to 13018 and 13052.5, possibly 13163.
DAX intermediate-term outlook
The late September sell-off below 12625.5 signalled an intermediate-term shift to a broader range seen as 12199.5 to 13244.5/279.
- Downside risks: Below 12199.5 sets an intermediate-term bear trend to target 11589.5, 10856.5 and 10159/10000.
- Upside risks: Above 13244.5/279 sets an intermediate-term bull trend to target 13461, 13824 and maybe 15000.
8 Hour DAX Chart
EURO STOXX 50 day trade outlook: Negative theme after rebound failure
Day trade update and view
A Friday-Monday rebound attempt above Thursday resistances seen as high as 3271, but stalling and falling from 3276 on Monday through 3220/14 supports, to resume negative pressures from last Thursday’s plunge through multiple supports to 3166, to keep the risk lower for Tuesday.
Day trade setup
- We see a downside bias for 3197/91; a break here aims for 3166 and 3136.
- But above 3230 aims for 3256 and opens risk up to 3276 (and possibly even 3301).
EURO STOXX 50 intermediate-term outlook
The push below 3139 signalled an intermediate-term shift to a bear trend.
- Downside risks: We see an intermediate-term bear trend to aim for 3046, 2844 and 2690.
- What changes this? Above 3349 shifts the intermediate-term bear trend to neutral; through 3395 to an intermediate-term bull trend.
