- The DAX has been quiet over the last week or so, as it is sitting on top of a couple of major moving averages.
- Because of this, anticipate that we may see some buyers coming back into the picture but now I think it is somewhat limited.
- After all, we are between Christmas and New Year’s Day, so very few people are stepping into the market to try to make a big player right now.
- When you look at the market situation, there’s a whole long it of negativity out there and of course, the DAX is an export-dependent index as Germany supplies much of the world with its heavy industrial equipment.
I don’t necessarily think that we are going to fall apart either. The 200-Day EMA sits underneath and is offering support. I imagine that the next several days will probably be sideways and choppy, but eventually we may get a little bit of clarity. At this point, it’s probable that we will see some type of noise in his, but eventually, we should get some clarity after the new year starts. After all, most traders are going to be worried about the holidays instead of the German stock index.
Make Sure You Use Smaller Positions
As there will be less volume, sudden headlines crossing the wires could cause chaos, so keep that in mind. With that being the case, if you do choose to trade the market over the next several sessions, please make sure that you use a smaller position than usual. After all, suddenly losing 10% of your account is not the way to end the year. Most professionals aren’t even bothered with this time of year, and as a rule, don’t trade until after the Non-Farm Payroll number in the United States is released. Generally, that’s basically one most of the volume starts to return to major markets.
Obviously, nothing is set in stone, and anything can happen, but your job is to protect your trading account, not to take wild chances. If we were to break down below the hammer from last week, and subsequently the 200-Day EMA, that could open a move down to the €13,300 level. On the other hand, if we break above the Thursday candlestick, we could go looking toward the €14,500 level.
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