- The DAX has fallen a bit during the trading session on Thursday, as it looks like we are going to settle in on the 50-Day EMA, perhaps even the 200-Day EMA.
- At this point, the market looks as if it is starting to show a little bit of lackluster momentum, and I think at this point it makes sense that we hover around these 2 moving averages.
- After all, with the lack of liquidity, it’s difficult to imagine a scenario where the market suddenly takes off.
The hammer from the trading session on Tuesday suggests that we have a lot of support underneath, and if we can stay above that area, the market does have the ability to hover in the general vicinity, or perhaps even bounce a bit to reach above, at the resistance barrier near the 14,500 level. That obviously would take some type of catalyst or some type of follow-through with the upward momentum. Currently a year, it’s difficult to imagine that there is a headline coming that’s going to change everything, so I think what we have is a situation where the market is simply going to kill time.
DAX Likely to Go Higher
However, if we do get some surprise announcement, they could send this market reeling. If we break down below that hammer from Tuesday, that could really send things much lower, perhaps opening a dive down to the €12,800 level, maybe even lower than that. After all, the DAX is Germany, and Germany of course is a major export economy. In other words, needs to see some type of “risk on movement” around the world for the DAX to continue going higher.
There are a lot of concerns when it comes to the European economy, which of course will have a direct effect on what happens here. After all, Germany sends a massive number of exports throughout the EU, and as it is heading into a major recession, it is going to continue to cause some pressure on the DAX. At this point, I think it’s likely to see some resistance above on short-term rallies. If we were to break above the €14,500 level, then the DAX could really start to take off. However, I don’t think we get that between now and the new year. If anything, we could see a little bit of selling.
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