- The German index has been rather bullish for some time now and it took off again during the trading session on Friday.
- At this point, it looks like the 18,800 euro level is going on for a little bit of resistance, but this is a market that you have no business being short of.
- I do think we go much higher given enough time and therefore I remain very bullish of the DAX.
- In fact, I believe that the German index will be one of the better performers over the next several months.
A short-term pullback is very possible at this point, but I don't necessarily think that means anything other than simple profit taking. After all, we have shot straight up in the air for a little over a week now and have gained about 800 euros. So, it does make sense that certain people would be taking profit. Other people might be closing shorts that have been completely blown up, trimming profits a bit and staying long anyway. After all, there’s absolutely nothing on this chart that suggest you should short the DAX anytime soon.
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Overall, the DAX Will be Noisy but Bullish
In general, this is a market that I think continues to be very noisy and bullish, but I don't necessarily think you can go forever straight up in the air like some people buying here probably are expecting. With that being the case, I remain bullish, and I am looking for dips in order to add to an already existing position.
I also believe that the DAX will eventually find its way to the 20,000 euro level, mainly as Germany is now exiting a recession and that of course is a huge thing for the stock market itself. Beyond that, the euro is still historically cheap, so exports are still very affordable in other economies. Remember, the DAX is full of export driven companies, so this is a major influence on this index, perhaps more so than many others.
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