The German index has rallied significantly during the day on Wednesday, slicing through the psychologically and numerically important thousand €750 level. If we can stay above this level, we should continue to go higher, and reach towards my longer-term target of €13,000 above. I believe the dips continue to offer buying opportunities as the DAX is the bellwether for the rest of the European Union. The €12,500 level underneath should be a “floor” in this market, and if we can stay above there, we continue to see this market as one that is in a major uptrend.
Part of what helps is the EUR/USD pair falling, which of course makes German exports cheap. This keeps the DAX attractive to most traders, and of course it’s easiest way to play the European Union and potential growth. The €12,500 level underneath being broken would be the market sending itself down to the €12,000 level after that. I do believe that every time we dip, buyers should jump into the market and perhaps try to push towards the €13,000 level. Once we break above there, the market could make its longer-term move towards the €15,000 level. That is my longer-term target, but it’s going to take quite a while to get there. In the short term, I believe that selling is all but impossible, as it would be one of the more foolish things to do, trying to call the top of a market that has been so strong. In fact, the DAX is one of my favorite indices right now.