DAX Outlook, August 2023 Update

July performance confirms seasonal pattern for Q3: volatility ahead

«When a market starts to advance, it continues upward until it reaches a level where supply and demand are about equal and prices come to a standstill. Then supply increases until it exceeds demand, and prices start to decline. In a long decline or a long advance, a level is reached where the supply is absorbed adn prces go on to the next level, where they meet another large supply adn absorb it, and finally to a levere where the supply is so much grater than the demand that distribution takes place and price start on a long trend down. This is why many weeks andw sometimes several months are required at bottom or top to complete accumulation or distribution before a big move starts. People who buy or sell the first or second time that the market halts after the trend turns, invariably lose money because it is simplu a halting period to absorb offerings or to supply a demand at that level, after which the main trend moves on to the next level […]» — Truth of the stock tape, W.D. Gann

Truth of the stock tape | W.D. Gann

«Quando un mercato inizia ad avanzare, continua a salire fino a raggiungere un livello in cui domanda e offerta si equivalgono e i prezzi si fermano. In seguito, l'offerta aumenta fino a superare la domanda e i prezzi iniziano a scendere. In un lungo declino o in una lunga avanzata, si raggiunge un livello in cui l'offerta viene assorbita e i prezzi passano al livello successivo, dove incontrano un'altra grande offerta e la assorbono, fino ad arrivare a un livello in cui l'offerta è talmente superiore alla domanda che si verifica una distribuzione e i prezzi iniziano una lunga discesa. Questo è il motivo per cui sono necessarie molte settimane e talvolta diversi mesi per completare l'accumulo o la distribuzione prima che inizi un grande movimento. Le persone che comprano o vendono la prima o la seconda volta che il mercato si ferma dopo l'inversione di tendenza, perdono invariabilmente denaro, perché si tratta semplicemente di un periodo di arresto per assorbire le offerte o per fornire una domanda a quel livello, dopo il quale la tendenza principale si sposta al livello successivo […]» — Truth of the stock tape, W.D. Gann

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August Outlook for DAX Index

From diamonds comes nothing, from muck comes flowers. 2023 has been a really interesting year in so many ways. Being able to handle things when they go well is easy; however, it is difficult to fight and stay afloat when everything seems to be going against you. I improved management aspect of positions, making the most of my Master Time Cycle method, did no damage and managed to weather the headwinds. Those who know me personally know that it has been a tough year so far, but now it is time to take some revenge. If you work well in trading, with just a few trades you can make up all the lost ground. Let's dig in.

In the last Outlook in July, I was clear: reversal is coming. And so it has been. The month has just begun is really important for a number of factors that we will explore in this article. First, let's start with an analysis of the basket of companies make up the DAX index: technology and financials have been running so much, as has Nasdaq, which is extremely connected to the German basket; therefore, recent profit-taking is in perfect timing with seasonality.

Technology leads DAX Index by industries | DTI®