- The German index has rallied a bit during the trading session on Tuesday as we are threatening the 22,500 euro level.
- The 22,500 euro level is an area that previously has been support and now should be resistance.
- This area could be important from a longer-term standpoint, but the momentum will be needed to pick up if we are to break higher at this point.
- It is extended to say the least, as we have shot straight up into the air at this point in time.
The Noise is Still a Problem Overall
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The market continues to be a lot of noise just waiting to happen because we are extended short-term pullbacks should end up being buying opportunities though especially near the 50 day EMA which is closer to the 21,750 euro area a breakout to the upside could open up the possibility of a move to the 23,200 euro level but that is an overextension just waiting to happen. This market continues to outperform, so sooner or later there will be profit taking.
After all, we're already overextended so it wouldn't surprise me at all to see a little bit of a pullback in the DAX but I certainly would not get short of this market there is still a gap that sits just above the 21,500 euro level and ultimately if we fell we could fill that area but I think there would be a lot of buyers willing to get involved anything below there then opens up the possibility of a significant drop towards the 200 day EMA, but that would probably coincide with the other indices falling apart in general. think this is, like I said, overdone, but I also think it is a market that should not be sold into just simply looking for value if you get the opportunity.
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