DAX Xetra (cash index)
An acceleration of the selling pressure on Friday has seriously questioned the prospects of a recovery in the DAX.
Previously, the pivot around 12,600 has been a key gauge and the decisive close back below this pivot on Friday coincided with a decisive breakdown of a uptrend channel.
- However, the selling pressure has been contained to an extent with the intraday rally off 12,470 and this is an initial level to watch as the market has dropped back again early today.
- The first higher reaction low comes in at 12,400 from a mid-July support and will be the key support to watch in the coming sessions.
Early losses have been bought into so far, but the bulls have work to do in order to recover a degree of control.
Momentum indicators are now more mixed, with the RSI and MACD lines around their neutral points, whilst the slip in the Stochastics reflects more the sell-off that closed last week.
- Levels to watch are now 12,400 for a ramp up in bear pressure, whilst a move back above the 12,600 pivot again turns a more positive outlook ahead of last week’s high at 12,779.
How the market leaves this 200 tick trading band could be key now.
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