German equities traders continue to flex bullish muscles

The German index initially pulled back during the trading session on Wednesday to test the €12,900 level. This is an area that’s been important more than once, and it now looks as if we are going to continue to reach higher. I think we’re trying to build up enough momentum to break above the €13,000 level, which is a major, round, psychologically significant figure. If we can break above the €13,000 level, then I think were free to go to the €13,250 level next. While the DAX can be choppy at times, I believe that the EUR/USD pair is going to break down a bit during the summertime, and that should continue to make German exports cheap in comparison, driving corporate profits in Germany higher. This is a perfect scenario for the DAX to continue to climb, and I think that the €12,750 level will offer a bit of a “floor” in the market.

Ultimately, I think that we could eventually go to the €15,000 level, but that’s a longer-term call and I think that most pundits agree with this move. I think that we will eventually find reasons to go higher, and that pullbacks will offer value the people are looking for. If you look closely at the chart, you can notice a nicely formed uptrend line. This suggests that we are in fact going to continue this attitude.

DAX Video 10.05.18