ES / DAX big picture 03/11/14

After moves like last week all you can do is sit back and look at the bigger picture:

DAX is still underperforming and is retreating slightly from the highs today. It seems it cannot go up under its own steam and needs help from indices in other timezones.

Daily timeframe: Fridays VPOC exactly at the MCPOC of the most recent relevant horizontal range:

1

Zooming the same chart out to the weekly timeframe:

The 3 day balance above no longer seems relevant on this time-frame – it still plays its part on an intraday basis.
9600/9650 area is vital if DAX wants to climb above 10000. This volume area plays the exact same role as the 1960/63 did and does on ES (it is a pattern I have seen on many occasions on ES in the past).

Keeping it simple: Getting over and holding is a sign of strength. Inability to climb above here is a big clue for me.

DAX_mcpoc

I will be watching for absorption if price returns to that level (but it seems likely with ES making new all time highs during the seasonally and self fullfilling bullish period).

Imagine your p/l high water mark for the year co-incided with price near that level. The market dropped and you stayed long. You swore you would take your profits if price ever returned to that level. Maybe you will. Maybe others have that as a plan and will trade their plan. You just don’t know what is going to happen but you should have a plan and trade it.

ES Monthly:

ES continues moving in same direction. It is in the lower part of the channel. Some people use trend lines which show ES slipped out of the more aggressive up move it was in during 2013. I prefer to use a trend line with a % +/- (in this case it is 10%).

ES_Monthly

I know I said some things about trend lines but on lower time frames they are much more arbitrary and can disappear if you move from a 5 to a 10 min chart. Short term trend lines are useful to me for intra day zig-zag moves – they help to know when to take a trade off to avoid a retrace back to your entry level.

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