The German index fell significantly during the trading session on Tuesday, reaching below the €12,000 level before bouncing a bit. We then bounced above that €12,000 level, and then rolled over again to show signs of even more volatility. The uptrend line underneath should continue to keep this market somewhat afloat, as well as the €11,800 level. I think that the market should continue to be well supported in that area, so I think that it’s only a matter of time before we get some type of bounce from there that we can take advantage of. If we did manage to break above the recent highs, it’s likely that we could go to the €12,400 level, but that seems to be rather on likely to happen without some type of fight. In other words, although I am bullish of this market, I recognize that it’s going to be very difficult and choppy.
It is because of this that I am willing to buy this market, but only in small bits and pieces. I think that the best way to deal with this market is to add slowly when it proves itself to be correct, building up a more substantial position. I do believe that this area here should continue to be massive support, so if we were to break down below the recent lows, that would be a very negative sign, perhaps reaching towards the €10,000 level. However, my base case scenario is strength, which is a bit difficult, yet jibes well with the longer-term attitude.