- The DAX has gone back and forth during the course of the early hours on Tuesday, as we continue to see a lot of sideways action.
- All things being equal, the 20,500 level above is a bit of a ceiling in the market, and with the shooting star that formed during the trading session on Monday, it does suggest that perhaps we are getting a little overstretched.
- That's not a huge surprise when you think about it.
We shot straight up in the air for a couple of weeks only forming one negative candle which was the Monday Candlestick. Short-term pullbacks offer plenty of buying opportunities from what I can see, extending all the way down to at least the 20,000 level if not the 19,750 level.
Top Regulated Brokers
Alternatively
On the other hand, if we turn around and do take off above the 20,500 level, then the market should continue to go much higher. In general, I think this is a market that you still have to believe is going to go higher, but that doesn't mean that it has to do it right now. At the very least, I suspect that we are going to see a lot of sideways action in the short term. So, with that, I'm more of a buy on the dip type of trader. I'm not wanting to jump in right away. Unless of course we do break above that 20,500 level, which would kick off the next leg higher due to the momentum that's coming into the picture.
In general, I don't think there's an argument to short this market anytime soon. And with the ECB likely to loosen monetary policy going forward, I think the DAX will continue to be a big winner. That being said, you need to accept the fact that it will take some kind of fundamental momentum to jump into the psyche of the participants.
Ready to trade our stock market forex analysis? Here are the best CFD brokers to choose from.