German index falls during the week to find support

I believe at this point, anything related to Europe needs to be thought of through the prism of Italy. In other words, German fundamentals will have very little to do with the DAX, and it’s good to come down to whether or not the Italians can come to some type of resolution as far as governing is concerned. The DAX is the first place money goes to when looking to invest in the European Union, so it makes sense that it will be highly sensitive to what goes on in Rome or any other capital for that matter.

I think that the €12,000 level ends up being the “floor” of the overall uptrend, and although the recent high was a bit lower than the previous one, we may still be in an impulsive move to the upside, perhaps reaching towards the €13,600 level. I think this market is going to move based upon headlines coming out of whether the Italians can come to some type of resolution, and that makes for difficult trading. If we break above the top the weekly candle, that’s a very good sign that we are going to go looking towards the highs again. Otherwise, if we break down below the bottom of the candle, we may drift towards the €12,400 level after that, and then possibly even as low as the previously mentioned floor at €12,000 below. I think at this point, one would probably have to believe that the overall uptrend will eventually assert itself.

DAX Video 04.06.18