Summer ended..

Click prices for links to prior posts

Copper now at 371 
DAX 7350
FTSE 5800
Gold 1740
Silver 33.6


Where now?
DAX weekly

DAX approaching strong overhead and downtrend resistance.  Could be we get a brief push above, before a correction sets in.  However unless the trend changes that will be all it is .. a correction.

FTSE weekly

Also approaching resistance

Needs to break and hold above 5810, for test of 5870/5890

Formidable resistance around 5900.

IF the market can break higher obvious target is 6000

DAX/FTSE spread chart

When there is an uptrend can see that DAX outperforms FTSE.

Reasons? 

1, FTSE is quite heavily weighted with defensive stocks

2, DAX has only 30 stocks compared to FTSE 100, and many are cyclical risk on stocks.

However sometimes the spread widens too much.  For a relatively risk free trade sell DAX buy FTSE at these levels, possibly 200points, before uptrend resumes

When a prolonged market down turn occurs the tables are turned with the FTSE outperforming the DAX, in which case a spread trade can be held for longer

DAX daily A look at the CHOP!!

Well July to September was a noce move down and the rally off the lows in October was also a good tradeable move...NOW we are in that circle of CHOP///

Note: Key is preservation of capital...

Personally I feel the bullish scenario will win once this chop is over..too many bears looking for the drop, high VIX (volatility), and  DESPITE the bad news, EU coming to an end,  blah blah blah...we are in a CHOP...

Obviously as in all trading many scenarios could play out...but i give the BULLISH case 75% and the bearish case 25%..

Well it's FRIDAY so not a good day to bet big either way..

Short OIL
Long DAX
Short EURO/DOLLAR
Long FTSE (day trade)
Short DOW

DOW DAX spread chart
at  these levels looks good to buy DAX and Sell DOW

DAX FTSE spread..again

Well the spread went a little higher than anticipated...added to the position..but looks to be coming in now..
The negative divergence still in play, MACD turning down...

FTSE DAX spread UPDATE.....

Following on form previous post...the spread got as high as 1270....now dropping back to 1187.  As can be seen on the chart this is setting up an even bigger negative divergence, so we may have a PROPER top in the spread and LONGER term looks like FTSE will outperform the DAX (unless of course it breaks out above that channel.. TA always has alternative scenarios, it's all about probabilities!)

The weekly chart also shows negative divergence.  If the spread narrows to 700, potential profit is 1000 pips per unit

FTSE DAX spread

Looking at this..
Selling DAX  simultaneously buying FTSE especially around 1200 spread....

IF markets start correcting FTSE has traditionally been more defensive than the DAX so in theory the spread should narrow as in previous market corrections/bear trends