Volatility in the markets continues!
Good morning and happy Sunday community,
the one that has just passed was a rather strange and peculiar week, with spikes of very high volatility and sometimes complex to decipher.
The VSTOXX (volatility index of the Eurostoxx 50) making highs and then returning to where it started shows us the very delicate moment in the markets.
However, the DAX index held up very well, confirming last week’s bullish view (read here). It gained a little more than 1 percent in one week, unlike the NASDAQ, which continues in its weakness.
This September is proving to be a very complex month from the point of view of graphical interpretation, especially because of the many erratic movements created throughout the day. In fact, markets often cause violent excesses in the evening hours and then take it back, fooling many traders.
For this reason, of the analyses one does, I always recommend waiting for the daily or at least h4 closings to avoid false signals, but above all not to create catastrophic ideas or excessive enthusiasm.
As I said, it was a week that we expected to be more decisive with the ECB board meeting . These meetings are now becoming a “non-event.” The ECB, in fact, has its hands tied with interest rates stuck at zero for several years and thus with no possibility of either raising or lowering them.
What, then, are the levels to be monitored?
On our dear DAX then, we remained in a very wide sideways trading range between 13319 (which in last Sunday’s analysis we had given as a bullish target) and 12876, the lowest trading range level.
The 12876 level has been touched several times and well defended by long traders. I therefore feel like confirming it again for this week as very important. I would also add 12743 as a level to monitor for yet another bounce.
As for the midpoint of 13098, it is an important midpoint and also a volumetric zone that divides the trend from long to short.
While breaks of the trading range levels (12743-13319) with confirmations on h4 and daily could trigger bullish extensions to 13461 and downward to 12512.
My view for this week on the DAX remains trending bullish, following the given levels. Right now I don’t see a weakness that makes me think of collapses. I am beginning to see, however, some fatigue on the climbs. Therefore, I personally believe in a still sideways market that will be moved decisively only by news about possible aid or news from the sensitive covid 19 issue.
Have a good week and happy trading!