DAX Forecast April 10, 2012, Technical Analysis

The DAX had a negative session on Tuesday, as we tried to rally above the €7725 level but failed. The recent weakness in this marketplace looks to be continuing, and we did in fact form an outside bearish day. However, we see quite a bit of support down at the €7500 level and above, so this is going to be a very difficult market to short. Why frankly, if we start to see some type of selloff in Europe, we would rather be short of Italian financials, or Spanish ones for that matter. If you’re going to short the markets, and you simply must hit the areas that are the worst in order to profit comfortably. We do not think that Germany is an area where we will see some type of rapid meltdown, and therefore the DAX should continue to outperform the other indices in Europe.