DAX traders rally for the week, finding support at a crucial level

The German index rallied during the week, bouncing from the lows and more importantly, the massive uptrend line that I have on the weekly chart. I think that the market breaking above the €12,000 level is also very bullish, breaking above the psychological barrier of course has attracted a lot of attention. There has been a lot of choppiness in the downward move recently, and I think that it should continue to be very noisy going forward. However, the fact that we bounced from this uptrend line tells me that there are still buyers in this market, and it’s very interesting for me because I think that we could see the so-called “smart money” starting to come back into the marketplace.

However, the other scenario is that if we break down below the uptrend line, somewhere near the €11,700 level, that would be very negative and could send this market much lower, perhaps down to the €10,800 level where I see the next major support level. Ultimately, this is a market that I believe will find buyers if we can get some type of bullish market sentiment, or perhaps good news coming out of the trade war tensions coming out between the United States and China. I think that as long as we can avert a trade war, that should help this market going forward. The euro continues to strengthen longer-term, so that could work against the value of the DAX and spurts, but I think a longer-term we are more likely to be correlated with the overall global stock markets.

DAX Video 02.04.18