The DAX30 equity-linked futures is in seasonal trading, as per the monthly trading schedule. I have posted the day chart of the continuous futures contract for the DAX30 below, with the latest ‘long signal’ as per the green arrow. The DAX30 is consolidating below the previous day-chart up-trend line, which is posing resistance for the market.
The weekly line chart adds more information, displayed below. The DAX30 experienced a heavy pull-back from a blow-off top into early 2016, and has since climbed above the recent weekly down-trend line, and looks to be in a high-level contraction. The lower panel shows weekly MACD crossover (12, 26 week) in bullish alignment – the faster 12-week indicator has pulled back into the slower 26-week MACD line – confirming a weekly contraction in momentum. The weekly momentum pullback in the context of a bullish intermediate directional trend may prove to be optimal trade locations. The bigger question is whether the DAX30 can follow the US equities higher, given its relative underperformance. This would also suggest that the BUXL (German Bonds) should get weaker from here as well. However, the BUXL has already posted a large downside corrective move in price over the past 2 weeks and comes back to support at the 182 level, below which there is a lot of space on the chart. If the BUXL breaks down further from here, the DAX30 will go higher. With a weekly stop a 10,400, the position risk justifies the exposure.
Futures Trading 