German index fell slightly during Wednesday session

The German index fell a bit during the trading session on Wednesday, breaking down towards the €12,300 level. The area has a significant amount of support down to at least the €12,200 level in the short term, and most certainly at lot of psychological support at the €12,000 level under there. Keep in mind that the markets also have an uptrend line just below, so this is a situation that could keep the market afloat. When I look at the hourly chart over the last couple of weeks, it forms a huge “W pattern”, suggesting that the buyers are trying to form a major base. If we can clear the €12,500 level, the market is likely to continue to reach towards the €13,000 level over the longer term. Ultimately, this is a “buy the dips type of situation, and I think that will continue to be the same going forward. It’s not until we break down below the uptrend line that I would consider selling this market, something that I don’t expect to see happen anytime soon.

Expect a lot of volatility, but I think that the overall attitude of the market will continue to find buyers more often than sellers, so I like the idea of picking up value when it appears. Longer-term, I expect that we continue to find value in Germany as trade tensions calm down between the United States and China.

DAX Video 12.04.18