- The German index did pull back just a bit during the trading session here on Wednesday, but it looks like the 50 day EMA is coming into the picture to perhaps try to support the market and maybe send it much higher.
- Ultimately, this is a market that I think given enough time probably will end up being a market that goes looking towards the 24,600 euro level.
- If we do break down from here, then it wouldn't be a huge surprise to see this market drop down to the 23,250 level, but that’s an area that's been significantly defended.
So, I think you have to look at this through the prism of a market that is trying everything it can to build up some type of momentum or perhaps even take advantage of the higher surge once traders come back from vacation season.
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On a Breakout in the DAX
Once we break the 24,600 euro level, then I think you've got a situation where traders will go looking to the 25,000 Euro level. Anything above there, then it kicks off a new leg higher. I don't have any interest in shorting the Dax. I do think that it's positive, but this big, huge move that has been basically digested since the middle of May, I think is getting to the point where people might be comfortable with these higher levels.
As a general rule, if you can see the market except these higher levels, generally, traders feel okay, and they get involved in our buying. So, watch that 24,600 euro level. Because if we can break above there on a daily close, that would be a sign, especially on a significant amount of volume, that buyers are willing to come in and push this index higher.
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