04/04

DAX -1.5% @ 6871 , ES @ MCHVN key area 1397.5, EURUSD at 2 week low

The European markets have sold off as a continuation of yesterdays decline on the back of FOMC.

Fundamentally the news has been poor on Auction results and Retail Sales:

The million dollar question. Is this selling over or will it sell off more in the US session? My feeling is that absent some comments it will sell off some more. 

Price levels as mentioned were:

1417 – upside resistance and double top
1410 – 2 day pivot
Key area 1394-97 – we are there right now – (under 1400 round number / psychological level)
1387/1388 – HVN and multi day VPOC – decent support
1377/1380 – HVN – traded in this area before trending upwards – HVN is a magnet but I prefer 1371.5 / balance bottom is stronger support.

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2 thoughts on “04/04

  1. how were my levels?

    I wrote the post at @ 9:34 am BST (4.34 EST) as the market dipped under a 2 day low of 1400. It was at the top of the area I identfied as key. I was not a buyer as I expected further downside.

    I had said: “Large volume is building at the MCVPOC at 1397.5 / HVN 1396. This area also contains MCLVN 1394 / MID of Current balance at 1393.75. This MCLVN gives the composite double D distribution – should be strong support”

    What happened? 1397 did provide support after the drop on European data (actually 1397.5 was the overnight point of control and the balance was 2 pts above and below 1397.5 as the market entered choppy European lunch time trade).

    It did create a lower low after ECB interest rate and Draghi comments that “any talk of exits are premature” – which was apparently interpreted as dovish and set further bearish tone.

    After a move like this I figured there would be some further sell off after the US opened even though it sold off last night after FOMC. After market failed the key level there were poor ISM numbers. Market continued to sell and found support 1 pt above the next level I had marked when I said:

    “As I kept saying 1387/1388 support – I expect this to continue to provide decent support. I have a trend line in orange which needs to hold for the up-move to continue. A higher low above the 1387/1388 area will confirm continuation higher. As said before below 1387/1388 I expect a test of 1377, 1371.5.”

    I wondered why there was 1 point in the difference, I thought it might have been a sucker stop however I realised the upper boundary of the area of interest was actually 1388.5 – the low of today and the 2 day VPOC from 03/14 and 03/28 (identified on march 28 and march 29)

    Clues for the future –

    A drop under balance mid is a key observation.
    It has managed to make a higher low at 1388.5 above previous low 1386.25.
    1396-97.5 area looks like support turned resistance
    1388.5 again support

  2. Other observations and summarisations:

    The HVN’s 1388.5 and 1396 are confining todays range

    1388.5 was VPOC on 03/14 and 03/28
    1396.25 was VPOC on 03/29

    1392 was VPOC on 03/23 – todays is 1391.75

    The combined MCPOC at 1397.5 is todays ONPOC.

    I uploaded a corrected chart – my line in the previous composite at 1396.25 was 3 ticks away from the correct level

    Also, the market shot through 1394 but this functioned as upside resistance during the US session and support in the final hour.

    Cash close was on the balance mid at 1394 – could call it a 50 back from the highs, which is bullish.

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