The DAX has been noisy on Monday, despite the fact that we have had good headlines coming out of the Middle East, as missiles aren’t flying for once.
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The German DAX went back and forth during the session on Monday after gapping higher due to the news coming out of the Middle East. After all, if the United States and the Iranians stop shooting missiles at each other, that does have people taking more risk, but it's also worth noting that later in the day in New York, we've seen a little bit of hesitation when it comes to putting big positions on. In fact, several of the stock indices in the United States had struggled a bit.
It is because of this that I believe this is a market that will be noisy, just as it will probably be noisy in other ones as we try to sort out whether or not we are going to get anything close to a lasting peace in the Middle East. I think we're probably a little early for that. So ultimately, this is a market that, given enough time, probably has a little bit of a giveback, but I also recognize that traders are looking at this as the gateway to Europe. That's generally how things are thought of in Germany, and with that being the case, it does make a certain amount of sense that we will remain in a state of looking at the DAX as the blue-chip index.
€25,000 Support Level and 50-Day EMA
The €25,000 level underneath should offer support. It's a large, round, psychologically significant figure, and it is also attracting the 50-day EMA. The 50-day EMA is an indicator that a lot of people watch closely from a technical analysis standpoint, and as a result, it does make a certain amount of sense that there might be a reaction to it.
Ultimately, this is a market that remains very noisy right along with everything else, but at the end of the day, it looks like it is still somewhat positive. So in this environment, I anticipate that it will be more of a buy-on-the-dip type of scenario, at least until something fundamentally changes. It doesn't mean it's going to be an easy path higher; it just means I believe that's what we're looking at.