DAX pulls back a bit on Monday only to find buyers

The German index pulled back slightly to open up the week on Monday but found enough support at the €12,950 level to turn things around and rally towards the €13,000 level. A break above there should continue to drive in more money, perhaps reaching towards the €13,500 level. I think it’s only a matter of time before buyers pick up value, and I believe that the €12,750 level underneath is the floor. It’s not until we break down below that level that I would consider selling, but even then I think there is likely to be a significant amount of interest in this market underneath.

The DAX is of course the “blue-chip index” of the European Union, and therefore if money is flowing into the EU, it will go to the DAX first. I believe this market leads the way for other European indices that you may trade, including the MIB, the AMX, the CAC, and many of the minor indices on the continent. Ultimately, this is a market that could be a bit noisy, but longer-term I think that it’s only a matter of time before we reach towards my target of €15,000. If we did break down below the €12,750 level, I think that the market would probably try to find buyers at the €12,500 level, an area that should attract a lot of attention. I think ultimately this is a scenario that continues to attract value hunters as well, as it’s a way to buy Europe “on the cheap.”

DAX Video 15.05.18