Equity Markets continued.. DAX, ES, YM, ...continued ... Beware of a bull trap after key reversal pattern...continued

What did I say in the last post and indeed since mid January? ? We need a few sharp red, long range days bars down to get this sell-off going. We know where price is heading thanks to old Dr Andrews which is the rather sharp angled down sloping black PF that has its centre line around the Dax futures 8973 area (dependent on price and time).
However beware of the massive FNL pitchfork, the CL of which is located above our target (at the 9068 in the daily chart)  at 8950 in the 240 min and below. Either of these important levels could cause support & a further topping wave upwards lasting weeks before another attempt lower. A break of the first level of 9060 looks likely..... look at previous price behaviour on the blue FNL pitchfork centre line. I have spent many years studying these FNL pitchforks (and their reaction lines) of which I am the only exponent and consider it one of my most important discoveries. You would be foolish to ignore the effect FNL pitchforks have on price just because its not part of Andrews original material....but hey, it's your choice.To draw an FNL pitchfork you choose a significant low ( for an upsloping PF and the reverse for a D/S PF), then ( but not always) the end of the first impulse wave immediately after the change of trend upwards and finally use the most recent low. Add the MT4 PF tool to draw the RL's and you should see the wave not only nicely disected by warning and reaction lines but definatively showing you the next sup/res reaction lines to be encountered.

OK, back to the markets and as I have said we have nowhere to go but down and 5 mins with the charts and a few downsloping pitchfork can give you a clue and no one really knows the magnitude of any forthcoming wave but and if you want my view and appraisal then get the free PDF weekly report on equity markets just fill in the form here http://commodity-analysis.co.uk/Free_Trial.php.

http://medianlinetrader.blogspot.fr/2014/01/the-dax-are-we-near-climax-plus-spoos.htmlhttp://medianlinetrader.blogspot.fr/2014/01/the-dax-are-we-near-climax-plus-spoos.html

update:Touchdown!!! 

If you do not know what you are looking at how can you understand price action...look at these screen shots all taken while the market was at 8990 within a few seconds of each other...look at the lines location ( especially the thick blue CL seen in the FNL fork discussed above) change in each shot....

and near the close,,,,,,,,,,,,,,,,,

 

Equity Markets continued.. DAX, ES, YM, ...continued ... Beware of a bull trap after key reversal pattern

We need at least a bar or two more after yesterdays and todays fall before we continue the move lower. We will at some point see the actual behavioural state of the market change as market participants realise that we are no longer trending up in a dosile manner (in the narrow PF channel with occasional small retracements) and once we see a few red long range daily bars down we should expect things to become volatile.I would think it is probable today and tomorrow should see a small bounce which may prove to be a good opportunity to take a short position if the setup presents itself  (DAX:and fill the gap at or in the  9270's) but remember that this may yet have another top to build as part of this pattern or still more weeks left before we start lower.

The emini S & P is only off a few handles at 1858 which is way less than even a shallow 23.6 Fib RT and has been the most difficult of all indicies to read and perhaps will tumble or catch up the most but for the moment we will stick with the DAX futures and YM which looks like a double tops but is not ( too narrow) but look at the first two charts for the basic horizontal pitchfork strategy.
All charts  and pitchforks and reaction lines below are reproduced in earlier posts and for a fuller explanataion start here or susbscribe for free PDF

 

 DAX

 

 

 ES H14

Equity Markets continued.. DAX, ES, YM, TF,NQ, FTSE etc.. topping pattern in the DAX coming along nicely

Equity Markets continued.. DAX, ES, YM, TF,NQ, FTSE etc...

This video demonstrates multiple line location with Andrews and non Andrews pitchforks and their reaction lines using the DAX futures on MT4 platform with the PF custom indicator

Or full screen can be seen here:

Below today....................

There is a very high up sloping andrews pitchfork seen below in black and another drawn off the gap pivot which has been reached.

Below are the same charts seen in the video: Use them to understand the problem of multiple  line location and how to use it to build structure on your charts. I suggest you try this method which works on MT4, MT5, Ensign Windows, Esignal ( ver10.6 or later) and DTN Televent ( during my trial in 2012) & Ninjatrader.

Equity Markets continued.. DAX, ES, YM, TF,NQ, FTSE etc... where do we stand now? I have warned you for weeks continued

Well, we now have all the pieces of our topping out formation coming together albeit in a way that was exceptionally difficult to trade. There is in my opinion no where left to go on the upside for the DAX and my reasons are listed in the less than half a dozen posts since mid January. Of course I am impatient and have found the psychological aspect of trading the last 2 weeks difficult and yet like an apple waiting to ripen & drop from a tree... these things cannot be rushed and indeed we may see another third top formation which means a run up to Fridays levels again over the coming days and weeks especially as we now have a gap to close. Can you see the head and shoulder pattern in the daily DAX? Perrhaps this move down will see us close the older gap at 9300 where we have an important centre line objective before any move higher to redress last nights gap?

Firstly here's the big picture weekly and daily:

Now check out these ...and look at the reaction lines from the purple PF..
The black fork uses the first pivot in the series of sideways price action on 14th -19th Feb but it fits as does its reaction lines but strictly speaking its non andrews and what i call a " discretionary pitchfork".

OK, Just to explain whats going  and the sort of  pattern i have a past historical example from the CAC40 below

Here you can see the downsloping reaction line # 6 (all ML & RL's drawn by automatic MT4 PF indicator- free source). Price has reached its objective ML at 3 and made a higher high. Then a retracement followed by an approach ( inverted head and shoulders)and pass through the down sloping reaction line 6 plus a retouch and then a lower high at 4 followed by the sort of dance we just saw last week in the DAX & ES,YM etc with gaps and a tight range with support provided by a historical ML (2) then a second high at 5 before a sharp fall and a retest of  RL 6 plus another RL at 7. This is just an example to show  how price can pass through the RL before falling away back but look to see how many bars the whole process took to unwind. Heres the FTSE futures below which look particularly unhealthy.

and the emini Dow below showing last weeks run up to 16386