The DAX tried to recapture the €12,500 level but gave back gains to show signs of weakness yet again. At this point, the market looks as if it is threatening the €12,000 level, an area that is a large, round, psychologically significant figure, and an area that a lot of people will be paying attention to. Short-term rallies will continue to see negativity, and the €12,500 level will continue to be an area that people pay a lot of attention to since “market memory” should be a thing there. After all, it was where we had seen a lot of support previously, and now that we have broken through there, we could see the market really start to drift lower.
The 50-Day EMA is approaching the €13,000 level and is dropping. Ultimately, the market is likely to continue to see that as a bit of a ceiling, assuming we even get there. The market is likely to continue to see the negativity continue, especially as the market is trying to run away from Germany and the European Union in general. After all, the German economy is going to struggle due to a significant amount of energy concern, especially now that winter is approaching.
Look for Rallies to Start Selling
- Ultimately, I think that the DAX will continue to be a bit of a punching bag, but we are a little overextended in the short term.
- I think rallies are what you’re looking for to start selling. The market will continue to see a lot of back-and-forths but will also have a lot of downward momentum.
- The overall attitude of the market has been getting worse for a while, and when you look at the recent past, every time we tried to rally, we gave up at lower levels, forming “lower highs” before we finally took out that crucial 12,500 level.
As far as buying is concerned, I don’t have any interest in doing so but I do recognize that bear market rallies can be quite vicious. Anytime that there is a bounce that shows signs of failing, I think that offers an opportunity for traders to continue the overall negative positioning that has been so prevalent. Furthermore, even though the Euro is losing value quite rapidly, it has nothing to do with helping exports, rather it has a lot to do with people fleeing Europe when it comes to the trading capital.
Ready to trade our DAX forecast online? Here are some excellent CFD brokers to choose from.