The German index continues to show support every time it pulls back, with the €12,200 level offering a significant amount of support. I think that the “floor” in the market is at the €12,000 level, and therefore I think that we will continue to continue to go higher. The €12,500 level above is the initial target, and I think that short-term pullbacks will give you the opportunity to take advantage of the volatility and upward momentum. In general, I believe that the DAX will continue to benefit from the overall attitude of “risk on” situation, and of course if we get a resolution between the United Kingdom and the European Union, that could help this market.
I believe that the uptrend line on the daily chart holding as support is a good sign for the DAX, and that we will continue to go higher. I would build a small position initially, and then add as we continue to grind to the upside. I have no interest in shorting the DAX, at least not until we break down below the €11,800 level, as it would show a significant turnaround in a significant break down of support. I don’t expect that will happen, but I do believe that eventually we will have a reason to go long. Longer-term, I have said that the €15,000 level could be a target, but it’s going to take quite some time to get there. Expect plenty of noise, but ultimately, I believe that the buyers will be in control.