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well - if you watch the cloud of your presented chart it will be clear that the price can not go up: there is a horizontal line down of KUMO which can no attract price to wander through the cloud.
Of course we see a bouncing line around 12k (as you mentioned in the chart) - which might be broken finally again after these insane sideways moves.
All indications are here to see lower prices.
When?
We will see...
US Core CPI Surges To 40 Year Highs; Food & Shelter Costs Soar
While the market's volatility this week has been focused on UK pension funds and budgets and systemic risk, this morning's US CPI print will likely determine the next leg from here with expectations for an acceleration in core inflation and small slowdown in headline growth of consumer prices.
Disappointingly, for the hopeful bulls, Headline and Core CPI printed hotter than expected.
Headline CPI rose 0.4% MoM (double expectations) and up 8.2% YoY (hottere than the +8.1% exp)...
Source: Bloomberg
Core CPI is up 28 straight months, soaring to +6.6% YoY - the highest since August 1982...
Reason: Inflation numbers came out Germany had inflation rate in August of 7.4%, and in September jumped to 10%
This is the highest inflation since 70 years!
There is even a clear reason for this and it comes with the ECB's statement:
EXCLUSIVE ECB staff sees lower rate peak than market, sources say
WASHINGTON/FRANKFURT, Oct 13 (Reuters) - European Central Bank staff see the need for fewer rate hikes than markets now estimate to tame inflation, according to a new internal model that could serve as a key input in future deliberations, four sources close to the discussion said.
The new model, called Target-Consistent Terminal Rate, showed the ECB needed to raise its deposit rate to 2.25% - or even less than that if at the same time it shrinks its balance sheet - to bring inflation back to its 2% goal
This is well below markets' estimate for the ECB's deposit rate to peak just over 3%, suggesting that ECB staff consider inflationary pressures more modest than investors and even some central bankers.
If I now come to the point: How to trade such moves, then there is little to say since these types of moves are not very obvious to the retail trader beforehand, even in more advanced positions. Solutions to this exist and which one then chooses for his trading approach is individual as long as those traders are not from the inner circle of the big market institutions. Those people know what is coming and they do not have to guess. Some ways as following:
- Do not trade on such days as @Deetee.
- Use your profit from the past year to take the risk to trade without stop loss like @GFIs1 is doing.
- Place your calculated buy and sell orders in advance by your broker, means your are in general automatically field when market reaches your level and then may after jumps in the other direction. Works well with hedge strategies.
If you have some more and other ways, you may post it here for the help to others.
The Dax showed an extremely high volatility today.
This emphasizes the importance of consulting the economic calendar and not trading during important announcements
Hi @GFIs1
last Friday dax didn't take out prior high, not a very bullish indication.
chart attached
however:
- Friday after 17h30 CET dax down, basically just because it has been following the SP500 going down, and
- SP500 appears to be quite oversold, as shown by these charts: https://stockcharts.com:443/public/1107832/tenpp/5
so the direction for the next few days appears to me as quite uncertain and in order to limit possible sudden drawdown, I have replaced half of my short position with a bearish put spread on the index.
Even though options are expensive, have you ever considered using options to compensate for current high volatility?
thx.
DAX: After reaching 12,5k again some change is ahead:
In the 4h chart we see very thin support until tomorrow.
That can result in some lower prices this afternoon until tomorrow.
Let's see
