- The DAX continues to look for some type of support right around the 18,500 level.
- An area that of course has a certain amount of psychology attached to it but I also recognize that there are a lot of support levels underneath that we could be paying attention to as well.
For example, the 18,250 level and the 50 day EMA which sits just above it. If we were to break down below there it's likely that the 18,000 level, then becomes a bit of a floor. This has been a reasonable pullback but when you look at the chart, we've been bullish for quite some time and this occasional pullback is just something that you see from time to time.
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At this point, it gives you the opportunity to pick up the DAX with a little bit of value and perhaps send the market back towards the 19,000 euros level. Anything above there opens up the possibility of a move to the 20,000 euros level, which is exactly where I think we are going to end up before it's all said and done. Keep in mind that the euro is traditionally cheap so therefore exports coming out of Germany still are reasonably priced for people around the world and that of course is a major influence on what happens in the DAX overall. It's a very export-laden type of index and therefore it has a certain flavor to it if you will.
Pay close attention to overall risk appetite, because the text of course is not immune to that, but in general it does look like it’s going to remain bullish for the time being. I do like this index, it’s one of my favorite in the world and I do think that the Germans have much further to go given enough time. Ultimately, this is a market that ends up being more of a grind higher than anything else from what I see.
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