We start the year bullish

We start the year bullish! As I have commented in my previous analyzes of the market. The long-term Dax is still bullish and in the medium term it is bullish again as well. It is not about being a fortune teller but about seeing what the price does and following in its wake.

During the past month we have had the price between the support that is at 12,920 points and the resistance that is at 13,200 points. Whether or not these zones dilated, the price always returned to the range. Knowing this helps us scalpers to be careful in looking for a trend when the price reaches these extremes because it can turn. And for long-term traders it helps to know if they have to hold the bullish position or not. If the price decisively loses 12,920 points, it is a sign that the supply continues to rule the market, so it is not good to maintain a bullish position with the price intentionally coming against it.

In the short term, the 1 minute chart has been looking short. The price has broken down rejection zones over and over again until reaching support. The objective is to position yourself bearish in areas of rejection for the demand. That’s where there are more chances to hit and that’s where you risk less. You risk less because you enter where the price can quickly lose reason. It is the place where the crowd is most afraid to enter, those who operate emotionally and who do not want to lose. But at the same time, it is the place where the stop is tighter and where there is more travel in favor if it continues to press the trend.

The price says it all with its movement. The volume helps to understand the effort of the price to continue in favor of one direction or the other. Market research (indicators) help but should never prevail over price and volume.


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