August 1st, 2024.
Writing the blog around 8 pm CET, since I can't record a video (voice lost).
Trend Down Day on DAX, just 3rd we had this year.
RECAP
EARLY SIGNS OF WEAKNESS - IMPORTANT!
Breakdown below PMKT Support at 8:30 CET negated the idea of potential Neutral-Bullish Bias - since the zone from which market bounced SIX TIMES, were broken even BEFORE the OPEN. Then Failure of the Spring below PMKT low CONFIRMED weakness, then LACK of Inventory Correction (Gap Down Open, no attempt at all to go higher first). ALL SIGNS OF EARLY WEAKNESS... a.k.a. EARLY MARKET MESSAGE
Chart on 15 min used, to fit this 500+ pts day.
I am sick today, but still posted several posts on X, like the ones above.
WHAT WORKED?
Remember that Short term trading is about MONETIZING SETUPS, NOT about predicting direction. The best setup was IMO that Pullback to the broken 18,365-380; which is one of the classic and USUAL setups - with everything REQUIRED for the Pullback Trade: MOMENTUM, and CONFLUENCES (Fibs + Zone). This zone was "LINE IN THE SAND" for the Buy Side today, and acted as Resistance later.
Making FIBS in the real time is recurring topic in the Recaps, and you can see how I made it on this post:
So, basically, as market goes down, you make a fib from RTH High (optionally from PMKT High as well), and WAIT for a bounce to sell.
Example of fibs from PMKT High to the S1 zone, and from RTH High to the S1 zone
using Futures chart
S1 FADE as a standard setup, which was good for a 100 pts; and then Selling WITH the US markets. Where was DAX at the US OPEN? At Resistance. "One EYE on the SPX, once US markets OPEN". We had ADVANTAGE compared to US traders, since DAX already made more than Daily ATR move to the downside. So, traders PREPARED to seek bearish setups. Then, 15 min after US markets opened, SPX / NDX had sell setups, and additionally dragged DAX for more. US RTH session: ALL DOWN. OUTLIER DAYS ACROSS THE BOARD.
Besides this, Aggressive breakdown trades worked - once below PMKT Low, and on Zones Breakdowns.
WHAT DIDN'T WORK?
USUAL setups that didn't work: Spring below PMKT L - giving info of weakness (when buy setups fails, that becomes a sell signal - this is from George Slezak and "Principals and Psychology of Day Trading"). Then S2 FADE which didn't work, which could be avoided, since it was in the US RTH session, and under influence of the selloff there.
DAX INDEX CLOSE
After THREE FAILED attempts to break higher, and ONE to break lower from this triangle - easily visible on Weekly chart as well - today we have DECISIVE CLOSE below the lower trendline. At ~20:30 CET, DAX is around 18,000 - which means BELOW July Low 18,030.
Relja
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