We have been patiently waiting for global indices to reach key levels to take short positions. This morning we have already seen the ASX take an initial leg down after breaking down from the rising wedge structure. There are mounting concerns of a possible global slow down due to negative retail sales and manufacturing data coming from China. There are other fundamentals coming into play, including the delta variant of covid-19, FED tapering concerns, US debt ceiling, tensions in the Middle East and rising inflation. We have decided to turn to the CAC due to the major double top structure.
CAC Weekly Charts
CAC Daily Chart
There are a couple of technicals to be aware of. Major double top on the weekly chart alongside the top of the rising channel structure. There is also a retest of a previous broken trendline which is now acting as resistance.
Trade Setup: SELL Marke execution, current price on Focus Markets 6812, stop loss 6942 and take profit left open.
Stop loss: 130 pips
Pricing may vary depending on the broker.
DAX – The DAX also looks like it is going to break down from the rising trend line support adding support to our CAC short position.