Trade idea background
Last weeks Federal Open Market Committee (FOMC) meeting ignited a fierce rally, a rally that is now up against short-term resistance made out of the previous bull-market high set-back in late November early December.
Hourly oscillators are showing negative divergence and the possible third wave sparked by the FOMC meeting might have come to a conclusion.
A pullback should now, if it occurs and if we have concluded a third wave or any leg higher, reach one of the usually suspected Fibonacci retracements measured from Wednesday's low.
Trade management and risk description
The entry is important for a possibly successful outcome, short above 9,400 but below 9,428 and trade towards the outlined targets. Once the 9,355 level is reached take partial profits, lower stop to entry and trade towards the second and third targets. Square before close of trading today.
It appears as though, looking at US futures, that we might be in for a positive open so if we get a new high above 9,413 the Fibonacci targets have to be adjusted with the difference between 9,413 and the new high. For example, a new high at 9,420 would revise the targets seven points upwards.
The risk to this set-up is that it is a trade against the prevailing trend on pretty much every time frame, respect the stop level area.
Trade idea parameters
Entry: short at market but above 9,400.
Stop: 50 points above entry.
Target: 9,355, 9,335 and 9,286.
Time horizon: intraday.
DAX.I hourly cfd chart with prefered wave count
