DAX forecast for the week of October 9, 2017, Technical Analysis

The German index rallied a bit during the sessions that made up the week, as we reached towards the 13,000 level. That level is psychologically resistant, but I think it’s only a matter of time before we breakout above there and continue to go much higher. Given enough time, I think that pullbacks are buying opportunities, so at the first signs of support I’m willing to go long and start taking advantage of what has been a very strong and reliable uptrend. The DAX should continue to lead the rest of the European Union higher, as it typically does. I think the €12,500 level underneath is going to be massively supportive, and quite frankly I hope we pull back to that area as it would be an excellent opportunity to pick up value.

Alternately, if we break above the €13,000 level, I think that enough traders out there will be paying attention that we should see a fresh new round of money go into the marketplace, lifting it much higher. I believe that eventually we would go looking towards €14,000, but it would take some time to get there obviously. I have no interest in shorting this market, because of the overall strength that we have seen. In fact, it’s not until we would break down below the €12,000 level that I would become concerned about the uptrend. Ultimately, I think that this is a “buy the dips” market, and that we should continue to see so much in the way of bullish pressure that the breakout is almost a foregone conclusion, at least as close as you can come to in the trading markets. Longer-term traders may be waiting for a daily close above the €13,000 level, but I am also willing to take short-term buying positions based upon short-term charts and build them into a larger core position.

DAX Video 09.10.17