This Week’s Call – Trade a Break of 4745.0/53.5 - 4926.0.

Bullish signals for the 2nd Quarter have been confirmed with DAX sentiment posting a new 6 month high in June at 5179.5. However, since that top sentiment has weakened and in line with last week’s signals that were bearish, the market has posted a 3rd lower weekly high and low in a row. Weekly signals continue to point lower, but with last week’s dip attracting buyers back near the 200 day average rate, daily signals have improved with 3 higher daily lows and highs in a row. These conflicting signals usually mean that the recent rally is likely to fail, but with no bearish reversal pattern yet, this week’s outlook is cautious and is to trade a break of 4745.0/53.5 – 4926.0.
Losses through 4745.0/53.5, Friday’s low would end the sequence of higher daily lows and change the call to an outright sell, exposing sentiment to 4656.5/73.0/80.0, the low trades for May and last week and then towards 4555.5, the 9 week base.
However, gains through 4926.0, a recovery of half of June’s losses (5178.0-4673.0) would be very cautiously positive, changing the call to a temporary buy, improving sentiment to 4980.0/86.0, a deeper 62% correction and then towards 5094.0, the gap that remains open from the 12th June close.
The risk is the open or by 100 Pts from the break.