In my previous post, I said that I was looking to go long the DAX depending on what kind of price action occurs on Monday and Tuesday. See the chart below of Monday's trading session:
So like I said before, I was expecting price to play off the 50/61.8 Fibonacci levels. In the picture above, you can see clearly that we have a small body bull candle with a long wick at the bottom. This is the result of today's trading session. This is the kind of price action that I was looking for. Essentially, what it is telling us is that price opened higher than yesterday's close but then got sold down to the 50% Fib level. However, a lot of buying power then came in at that level and pushed price back to above the open.
This kind of price action is signalling to me that market participants are accumulating positions getting ready to go long. I won't put a trade in just yet because I feel that tomorrow's trading session will be more of the same. This is because there isn't really any key significant data affecting this instrument until Wednesday-Friday.
However so far so good. It looks like the Head and Shoulders pattern is holding and our potentially lucrative long trade is still on the cards.
Good luck and happy trading!
The Trainee Speculator
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