Monday, January 19, 2015

DAX Germany Weekly Chart New All-Time Record High Megaphone Expansion Pattern

The DAX prints a new all-time record high at 10293 and new all-time closing high at 10242.  For the last three months the indicators are mixed with the RSI, histogram and stochastics negatively diverged but the MACD line and ROC are long and strong. Thus, after a drop in this weekly time frame price will likely want to come back up again to the current levels and then perhaps neggie d will be set up across all the indicators to create a smack down and extended selling (this may be 2 or 3 weeks away). The upper standard deviation band is 10402 so this serves as an upside target. Price will need to seek the middle band at 9578 and rising if the upper band is violated.

The megaphone, or expansion pattern, is easy to see with the blue lines. A handle is drawn for the megaphone to create the illusion. Price is playing around at the upper rail of the megaphone and eventually the lower rail at 8600-8800 would be targeted.

Note the September-October selloff. Stocks had broken serious technical levels and were falling down the rabbit hole. This forced the global central bankers to act in collusion to talk the markets back from the edge. And the coordinated intervention worked pumping the stock markets upwards in a historic rally into early December. Of interest is the indicators in October. The stochastics and histogram were positively diverged wanting to spring price higher. The RSI, MACD line and ROC, however, all wanted lower lows in price and the RSI never came near oversold territory. The stock recovery in this manner verifies that the central banker intervention manipulated the stock markets higher. The interesting question moving forward is that after six years of intervention by the Fed and other central bankers, do markets have only 10% fluff underneath or is there perhaps 80% of fluff under the markets? This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

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