New declines starting to set up?
Looking at stock indices sellers look to be gaining momentum.
Watching indices today traders, we have seen building seller momentum that’s started to form continuations mainly on the 4H charts for now. This started early in the Asian session as U.S futures started to fall. The ASX200 opened lower after a solid fightback yesterday but failed to back it up with a 3.60% sell-off today.
Some major indices futures continue in the red, the DAX is 3.58% lower moving towards the European session open and the Dow is 2.75% lower.
Let’s take a look at a few 4-hour CFD index charts.
GER30 (Tracks the DAX)
Price held the previous resistance forming a new LH, momentum at point remains strong in sellers favour. Today price has made a mini-break but still have the hl to beat. For now, a continuation look to be building but sellers have to beat the last support low and 10,248 low to confirm the move. The %R has moved back below the -30 to -50% levels confirming current seller momentum. If buyers can hold from low/support low and resist sellers at the 10,248 low this could be a short-term low test which could spark a new counter-trend reinforcing the current consolidation.
US30 (Tracks the Dow)
As with the above, there are some similar signs here. The counter-rally stopped at a previous low, this can be seen as continuation evidence in a trend. The high set up a new LH. price continues to decline but remains above the minor support low and support low. The %R has moved below the -35 and -50% points backing up seller momentum. If sellers what to confirm this they will need to break the minor support low/support low. A break of the minor is step one to show they hold momentum. As mentioned above, if buyers can reject sellers at the low or support low the momentum might only be a short-term test and we could see the consolidation continue.