DAX and IBEX balancing on a rope….

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European markets are starting a crucial week with facing a bearish pattern formed a week ago. As we mentioned in one of our previous post, are slowly taking control in european markets. Although this might come as a surprise as european markets are near their multi month highs, the downward pattern finished last week gives rise to some concerns that maybe it is time for the markets to make a correction. These posts should be your alarm in order for to be more cautious as to what could be next. We mentioned last week that we expect the indices that completed the downward 5 wave move to pull back up towards their 61.8% retracements. That would be the point were traders could sell as that was an important resistance and the most possible level for the upward move to end.

dax

DAX has reached the 61.8% retracement at 7740 and pulled back down, only to close with more than 100 points lower. If you followed our analysis you could have profited those 100 points and more. What is in store next? Support is found at the lows of wave i or 7537 area. If our bearish concern comes true, then we expect prices to reach 7200 at least. Short positions should be covered above wave ii highs or 7738.

ibex

IBEX as shown in the above chart is in a similar position with DAX. The upward move that we expected ended just above the 50% retracement. If you recall our analysis, we would enter short positions either at the 50 and 61,8% retracements or at the making of new lows. In this case IBEX reacted stronger than the Italian MIB (38% retracement) and is now resuming the down move we were expecting. Confirmation will come with from 7895. Short positions should be covered above 8430 (61,8% retracement).

Concluding we see two major european indices follow the path of our analysis. This means that the correction has started. This scenario has the most probabilities for us. Therefore we should take advantage of it. No short positions allowed above the resistance levels we mentioned. For more info and details on how to trade these indices, become a subscriber and receive our newsletter and our exclusive tweets.

As always, thank you for taking the time to read my new post and feel free to comment on our analysis. If you have any question don’t hesitate to mail us at support@trading2day.com

A term used to describe a trader who is expects that a particular asset – be it a commodity, currency or product – to rise in value. The opposite of a ‘bear’.

The idea is that bulls attack by bending their heads and poking their opponents upwards with their horns, symbolising the fact that they are buyers, driving prices up.

Beliefs held by the aforementioned ‘bulls’ of the trading world, are described as bullish. Characterised by a generally optimistic outlook on the state of a given asset, a bullish outlook would suggest that a rise in value is imminent. Opposite of bearish.

A term used to describe a trader (bear) who is expects that a particular asset – be it a commodity, currency or product – to fall in value. The opposite of a ‘bull’.

The idea is that bears attack by getting up on their hind legs and striking their opponents down with their paws, symbolising the fact that they are sellers driving prices down.

Beliefs held by the aforementioned ‘bears’ of the trading world, are described as bearish. Characterised by a generally pessimistic outlook on the state of a given asset, a bearish outlook would suggest that a fall in value is imminent. Opposite of bullish.

A term used to describe a trader who is expects that a particular asset – be it a commodity, currency or product – to rise in value. The opposite of a ‘bear’.

The idea is that bulls attack by bending their heads and poking their opponents upwards with their horns, symbolising the fact that they are buyers, driving prices up.

Beliefs held by the aforementioned ‘bulls’ of the trading world, are described as bullish. Characterised by a generally optimistic outlook on the state of a given asset, a bullish outlook would suggest that a rise in value is imminent. Opposite of bearish.

HigherHighsLowerLows

Alexandros Yfantis
Alexandros Yfantis
Fascinated by financial markets, studied International Securities Investment and Banking in the UK, works as a Portfolio Manager in Greece and runs a technical analysis website. Enjoys travelling and spending time with his family and preparing for the black belt in Korean Karate.