Intraday rallies have been continually sold into over recent weeks and there is little to suggest that this morning’s rebound is any different.
In the past few weeks the market has been consistently drifting lower, posting a succession of either sizable bear candles or muted positive ones that are simply counter trend opportunities.
With yesterday’s break below support at 11,230 (which has been a basis of support previously, there is a sense that the market is increasingly bearish.
The DAX closed at the lowest level since December 2016 yesterday and there was an intraday break below the October low at 11,051.
Although this move was not held into the close, and followed by a rebound today, this now opens for further downside.
Yesterday’s move did not have the feel of a false downside break and with momentum indicators negatively configured with further downside potential in the current leg lower.
- The old support around 11,230 is now a basis of resistance and there is a gap to still fill, so this morning’s rebound is still likely to provide the next opportunity to sell..
- With 11,031 and 11,010 initial support, watch yesterday’s low at 11,009 with little support until 10,800.
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