- The DAX has pulled back just a bit during the trading session on Monday, as it looks like it is a little bit heavy at this point, just above the €15,100 level.
- That being said, the €15,000 level would be an area that I think would attract a lot of attention.
- Ultimately, I think the German index will leave the rest of the European indices, as it typically does. So, as we are overstretched, I expect the European indices the pull back in tandem.
Ultimately, I see plenty of areas that we could see a bit of support underneath, so, therefore, I think this is probably just going to be a pullback that people are willing to buy into, not some type of major shift. Ultimately, the market continues to see a lot of noisy behavior, and of course concerns about the global economy. After all, Germany is a major exporter, and therefore other countries will have a major influence as well.
Negativity Ahead
If the global economy tanks again, that will certainly have quite a bit of negativity in this market, as well as other major indices around the world. However, it seems like people around the world are betting on some type of soft landing, and therefore to be interesting to see how this plays out if they don’t get it. The ECB is becoming even more aggressive in their language, so that’ll be interesting to see as well. Alternatively, I think this is a market that is bullish so I’m looking at pullbacks as a potential buying opportunity, especially if we had some type of supportive candlestick on the daily timeframe.
That being said, pay attention to bonds as well because if the interest rates in the German 10-year start to rise again, that could cause major issues. Regardless though, I think we are simply stretched and ready to offer value. We may have to wait a couple of days to get that buying opportunity, but that’s okay with me because being patient is one of the best ways to trade the markets. I don’t wish to scalp the DAX, so therefore I think you’ve got a situation where a couple of days of the week would do everybody some good because it offers the opportunity for new traders to get involved. I would not chase this trader broke to the outside at this point.
Ready to trade our DAX analysis? Here are the best CFD brokers to choose from.