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These have different setups but each reasons to be topping

Copper, DAX30 and FT100

Copper, DAX30 and FT100 are all showing different but compelling potential bearish reversal setups. DAX30 and FT100 were always on our radar for weakness since they are loss leaders in terms of performance among major stock indices. Copper prices on the other hand has a positive correlation with stock indices so bearish setups in these three should be treated as confluent signals.

 

Copper potential Rounding Top

  1. Some analysts call this Dr Copper – a good indicator of growing economy. XCUUSD has a positive correlation with stock indices.
  2. In this weekly chart, Dr Copper appears to have broken below a rising 2-year trend line and is now at pullback resistance.
  3. In addition, there is a potential Rounding Top formation which is a bearish reversal pattern.
Copper potential rounding top on weekly chart

Copper potential rounding top on weekly chart | Source: Tradingview.com

 

DAX30 potential Head and Shoulders

  1. DAX30 has a very obvious potential Head and Shoulders bearish reversal pattern.
  2. For a better symmetry, it’s right shoulder could go a little higher to the black dotted horizontal line. However the current Bearish Engulfing candle is very compelling since it is nestled against the top of a downwards channel as well as 26-week ema has resistance. This is a risk traders have to take – there may be multiple signals, each equally compelling but the right one known for sure only on hindsight.
  3. Note the dead cross in the 13-week and 26 week exponential moving averages. For those unfamiliar with these averages, we discussed them here and here.
  4. Note also that DAX30 and FT100 to be discussed below are loss leaders when we overlay relative performance of major stock indices.
DAX30 potential head and shoulders

DAX30 potential head and shoulders

 

FT100 new 52-week low and pullback

  1. The most bearish feature of FT100 is the new 52-week low printed in February and then again March. I believe that once a new 52-week low appears, we don’t know when but there will be a next low coming.
  2. The next bearish feature is the dead cross between the 13-week and 26 week exponential moving averages.
  3. Unlike DAX30, FT100 has not shown any bearish price candle at the moment but it is nestled against potential resistance. Both DAX30 and FT100 could be at or very near to sweet spot to sell. Some patience and confirmation is now required.
FT100 pullback

FT100 pullback

Director, TerraSeeds Market Technician Pte Ltd. Trader, investor. @sohtionghum was picked ‘Top 70 Forex Twitter in 2015’.

“Dear reader, I do not have a financial license to give advice. I do not know you the reader. Your financial objective and risk tolerance may be different from mine. I am not responsible for any consequence of your action.

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