Charts 9th May 2015 EUR/DAX/Stoxx50/ES

Follow up to the charts from April 29th:

Euro chart shows the box with the levels I was watching for the past week after breaking out of the lower consolidation. There was a retest of the top of the lower consolidation (1.1060/80), rejection there followed by an up move to the breakdown balance (1.1350 and a small shift of that HVN to 1.1370). This was a big factor in the movement of stocks and bonds with Bunds experiencing a crazy sell off and some bad data from Germany on Wed/Thurs contributing to the lows (services PMI and factory orders)

Euro_short_term

DAX had shown “signs of weakness”, “subtle warning” and “overt warning” (see chart below). Inability to hold the key HVN at 11900 and this was followed by a flush to a poorly auctioned area from March:

DAX_longterm

I will be watching to see if 11900 is reached and whether it becomes overhead supply resistance.

Eurostoxx50 overshot that level but found support when DAX did:

Eurostoxx50

Likewise the ES with the low occuring during Globex. 2057 + 76 (3 month ATR) gives a target of 2130. (The monthly ATR has reduced as price is stalling here).

es_composite_long_term_plain

Inability to push new highs is obvious to a lot of people but the weekly chart showed rejection of the lows. In market profile terms the rejection of the consolidation are still puts the path of least resistance into fresh air and all time highs. Sellers are clearly present but buyers are hanging on for new highs and bigger picture uptrend is still there.

Good commentary from crackedmarket.com

While a lack of demand keeps us from breaking 2,120 resistance, we’re seeing a similar but opposite dynamic happen every time the market dips. Confident owners are completely uninterested in selling regardless of headlines or price volatility. When no one sells, prices bounce on tight supply.

es_weekly_range_plain

5 charts to tell if stock buyers are too bullish (marketwatch):

sentiment

ES 2 down days followed by up.

scenarios

I put together the attached for the ES. It aims to show what happens on day 2 and day 3 after a move with [volume] > [20 Day avg]

It is for 1259 days from ‘2008-11-17’ to ‘2013-11-08’. For a day to be considered in the results it has to have continuation on day 2.

I found that the range contracts on day 2 but expands on day 3. The probability of a 3rd successive down day is 40% days but the probability of a 3rd successive up day is 62%. This was only part of what I was expecting to find however finding out something you didn’t expect is a valuable part of any statistical study for me.

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