Yesterday we talked about Mondays perfect Spinning Top and warned of a possible pullback that could, over a few sessions, reach our main dip buying level at 6996. Well I must say that we didn't exactly expect this in a day! We actually made a low of 6994 but we are classing this a hold of our support. We have placed a Marabuzo line on yesterdays long red candle that comes in at 7076. This is the point the Bulls will need to re take in order to relieve the current pressures. There an awful lot to do here in order for things to get back on track so we will be looking to sell into any strength.
Indicators in Play
A Marabuzo line is the 50% point between the open and close on a large range day where these two points are at or close to the days extremes.
Summary
We were looking for a pullback with a view to buying dips. However, a dip buying market should not tear through supports in the fashion we saw here in the DAX yesterday. With this in mind we will now be selling into strength with 7076 our ideal entry point.
David has been
analyzing and trading the worlds financial markets for the past 25 years. After an initial grounding with Mercury Asset Management and Warburg Securities he went on to set up his own brokerage operation in London. Since then he has appeared regularly on Bloomberg Television and been involved in providing analytics on behalf of some of the worlds major exchanges. He is also a member of the Society of Technical Analysts.
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