Wednesday sees the DAX shooting higher, as we are seeing a general “risk-on” attitude around the world, with Germany being no different. I remain bullish overall, but I don’t want to chase this market.
DAX
During the Wednesday session, the market fell significantly to reach the 50-day EMA, only to turn around and bounce rather significantly.
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I think part of this is due to the congressional flip in the United States. That certainly gives hope for peace. Ultimately, some of the earnings coming out of Germany suggest that maybe the ECB may have to step in and soften things a little bit economically.
A pullback from here could open up the possibility of buying at a lower price
Regardless, this is an interesting chart for me because the DAX is testing the €26,500 level as I record this video, an area that has been a bit of a barrier previously. A pullback from here could open up the possibility of buying at a lower price.
On the other hand, if we were to break above the €26,750 level, then this market could really start to take off to the upside. Ultimately, rates are starting to show signs of hesitation. We will have to see, especially as we watch the German 10-year yield.
I like the size of this candlestick. It does tell me that there are buyers out there, but I do not want to chase this, especially as we are slamming into resistance. Again, a short-term pullback opens up the possibility of perhaps finding cheap contracts, and I would love to find some type of opportunity closer to €26,100.
I have no interest whatsoever in shorting the DAX. On top of this, there is quite a bit of stimulus coming into the German economy via infrastructure spending. So, we will see. I like this as a buy-the-dip scenario.
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