- The German DAX initially fell during the trading session here on Monday but has turned around the show signs of life.
- All things being equal, this is a market that I think you need to pay close attention to because it has been so bullish.
- Now, some people will look at this as possibly a bit of a rising wedge.
However, we would need to see the market break down pretty quickly to make that happen. It could open up a move down to the 23,000 euro level. Really at this point though, I don't like shorting an uptrend regardless. I just don't care. I don't do it. Indices generally aren't built to fall anyway. So I'm looking for an opportunity to get involved in this market on dips.
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Early on Monday, you certainly had that opportunity, but now it looks like we are trying to sort out whether or not we can continue to go to the upside. With that being said, I think you also have to keep in mind that this is a market that has been very noisy on the way up, but has been, more importantly, resilient. So, with that being the case, I think ultimately this is a market where you are looking for some type of value every time we get the pullback. And I just don't see how you can argue with this overall trend.
The 50 day EMA is right here around the 23,730 level and is rising. So that could also offer support. Remember though, when people look to trade in the European Union, Germany is pretty much the first place they go. So with that, I think you have to understand that this is a market that offers value. You need to take advantage of it. I have no interest in shorting and really, I'm not too concerned about that until we break well below the 200 day EMA, something we are light years away from. I think it's more likely we will hit 25,000 than break down to that level.
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