DAX has a strong week, testing important resistance line

The German index rallied during the week, reaching towards the €12,500 level, an area that has been both support and resistance several times. I think that the uptrend line underneath should be more important though, and with the hammer that formed during the previous week, and the fact that we have broken above the top of it, suggests that we are going to continue to see buyers jump into this market, even if we do drop from here. The €12,750 level will be resistance, but if we can break above there, the market should then go to the €13,500 level after that. I like the idea of buying the DAX on the longer-term charts and every time we dip, as it represents value. If we were to break down below the uptrend line, that would be very negative and could send this market down to the €11,750 level, and then possibly beyond. That would be a breakdown of a major uptrend line, and therefore could change the entire outlook for the market.

If we can avoid some type of trade war between the Chinese and Americans, I think that the DAX will continue to show signs of life as it is a great place to put money to work in the European Union if there is a bit of risk. I think that the market should continue to see money flow into that region if the trade war is avoided, as it keeps the bullish traders continue to favor putting money to work as we have had a massive selloff and now we see quite a bit of value in several indices.

DAX Video 16.04.18