DAX dominated by bears dragging the market lower throughout the day
DAX Performance-Index (DAX) Technical Analysis Report for Dec 06, 2018 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, DAX finished Thursday at 10810.98 tanking €389.26 (-3.48%). This is the biggest single-day loss in over two years. The last time we've seen such an unusually strong single-day loss on November 20th, DAX actually gained 1.61% on the following trading day. Today's close at 10810.98 marks the lowest recorded closing price since December 6, 2016. The bears were in full control today, moving the market lower throughout the whole session. Ending with a weak close near the low of the day sets a bearish note for the next session.
Daily Candlestick Chart (DAX as at Dec 06, 2018):
Thursday's trading range has been €301.03 (2.72%), that's far above the last trading month's daily average range of €157.65. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for DAX.
One bearish candlestick pattern matches today's price action, the Black Candle.
Crossing below the lower Bollinger Band for the first time since November 20th, prices have shown unusually strong downward momentum in the short-term. This might either indicate a potential selling climax after which prices could head back up towards the mean of the Bollinger Bands at 11282.52 or signal the beginning of a strong momentum breakout leading to even lower prices.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Among the 12 market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "52 Week Low" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for DAX. Out of 40 times, DAX closed higher 55.00% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 75.00% with an average market move of 2.57%.
With five out of the other five Major European Indices closing lower today, the ones that stand out on the negative side are BEL20 losing -3.42% and N100 closing -3.42% lower. None of the markets managed to end the day in the green. Read more