DAX pulls back looking for value on Tuesday

The German index pulled back a bit during the trading session on Tuesday, showing signs of short-term exhaustion but when you look at the longer-term charts, you can see that every time we pull back value hunters come into the market looking to pick up the DAX a bit. I think that the EUR/USD pair will have a lot of influence in this market as well, because quite frankly it makes German exports cheap. I think that every time we rally, it will add more fuel to the fire as we try to break above the €13,000 level. If we can break above there, the market should then go to the €14,000 level, and then the €15,000 level. I believe that currently, the €12,750 level is a bit of a supportive level, and I think that a breakdown below there could unwind this market down to the €12,600 level.

I don’t have any interest in shorting the DAX, at least not until we were to break above the 1.21 handle in the EUR/USD pair. Right now, that doesn’t look very likely to happen, and DAX trader should continue to focus on the low interest rates in the European Union and of course the idea of cheap German exports. I think that the market continues to go higher, but it obviously will be very difficult. I think that adding on dips in small increments will continue to be the best way to trade this market, as we are most certainly in an upward trend. Selling is all but impossible right now.

DAX Video 09.05.18