DAX go sideways during quiet trading on Tuesday

The German index went sideways overall during the trading session on Tuesday, grinding around just below the €12,600 handle. I think that if we can break above that level, at least on a daily close, then we should continue to go much higher. I believe that the market participants will continue to look at pullbacks as value, and with the EUR/USD pair breaking down, it’s likely that people will be looking to take advantage of cheap German exports, sending the DAX higher. In the short term, I believe that the €12,300 level underneath will be very supportive, and that there is a “floor” near the €12,000 level.

Once we break out above the recent highs, I think the market will go looking towards the €12,750 level, and then eventually go looking towards the €13,000 level. Longer-term buying of dips continues to be the best way going forward, as we have seen a strong uptrend, but it seems now that we are simply trying to build up the necessary momentum to go higher, taking advantage of the longer-term uptrend, and the smash through the short-term resistance.

I believe that the overall attitude of this market will continue to be driven by global growth in general, as the German index is a proxy for the entirety of the European Union for most traders. Remember that the European Union is much more sensitive to exports than the United States, so this gives us an idea as how the EU is performing overall and vice versa.

DAX Video 02.05.18