- The German DAX initially fell during the trading session on Tuesday but has turned around to show signs of life.
- By bouncing the way we have, it’s very likely that the market will continue to be bullish over the longer term, and with that being said, I think if we can break back above the €23,000 level, then you have the possibility that we will continue to go much higher, continuing the overall uptrend that we have seen for quite a while.
Underneath current trading areas, we have a certain amount of support near the €22,250 level that we must pay close attention to, and then again at the €22,000 level. As long as we can stay above both of these areas, I suspect that the uptrend will continue to be very strong, showing signs of life quite often. Ultimately, this is a market that has been bullish for quite some time, and I think what we are doing right now is trying to work off some of the “excess froth” from the big move to the upside. Furthermore, it’s probably worth noting that the 50 Day EMA is near the €21,500 level and rising. I think the 50 Day EMA will eventually backup the dip and support going forward.
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No Interest in Shorting
I do not believe in shorting the DAX at this moment, because Germany is exiting a recession and is one of the better places to put your money at the moment. I don’t how long that lasts, but it’s very likely that we will continue to see money flow into Germany. With that in mind, as long as there is money willing to go into Europe, Germany will be one of the first places. If we do break down below the 50 Day EMA, then you could see a bit of a change, but right now I suspect that we have plenty of buyers looking to pick up value any time they can.
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