German index rallies as uptrend continues on Thursday

The German index initially pulled back on Thursday but found enough support underneath to turn around and show signs of life again. I believe that the €12,750 level is the “floor” in the uptrend right now, and I think that now that we are starting to clear the €13,000 level, we should continue to go much higher, perhaps targeting the €15,000 level longer term. I believe that buying pullbacks will continue to be the way going forward, as I think that we continue to find value with a falling Euro, offering cheaper German exports in general. I think that will continue to be the theme over the summer, as we should continue to go to the upside, as the correlation continues to remain strong.

If we did breakdown below the €12,750 level, then I think the market could break down significantly. If that did happen, I think that the market could probably fall apart, perhaps falling as low as €12,000, but I think that it’s very unlikely to happen, this trend has been very reliable and consistent. I believe that the US dollar is going to continue to strengthen over the course of the summer, and by default that almost always guarantees that you’re going to have a lower valued Euro. All things being equal, I believe we continue to look at dips as buying opportunities and add every time we make a fresh, new high to a core position.

DAX Video 11.05.18