German index rallies on Friday

The German index rallied significantly during the session on Friday, breaking towards the €12,850 level. I think that short-term pullbacks are likely, but it’s likely that we will find buyers on those dips, taking advantage of value. The EUR/USD pair continues to breakdown rather significantly, and that makes exports coming out of Germany very attractive, as they are cheaper. The corporate profits should continue to expand in Germany, and that of course helps this index overall.

I believe that short-term pullbacks continue to be an opportunity to take advantage of value, and I think that the market will probably continue to reach towards much higher levels, perhaps even €15,000 by the end of the year. That has been my target for some time, but obviously is been very bumpy in general. I think the €12,750 level should start to bring in support now, and I think that the market is all but impossible to sell as we continue to deal with so much bullish pressure. I think that the market will course be reactive to the EUR/USD pair, interest rates in the United States, and then of course, it’s coming from the ECB, with Mario Draghi recently suggesting that the ECB would keep interest rates low for “an extended period of time.” Lower rates help stocks in general, so that should continue to pressure this market higher over the next several weeks.

DAX Video 07.05.18