- The DAX in Germany has shown itself to be somewhat positive during Monday trading but is giving back a little bit of the gains after the market has closed in post-market trading.
- The DAX has been hugging the 50 day EMA, which is an indicator that a lot of people pay close attention to.
- With that being said, I believe that at this juncture, you still have a relatively flat market.
Hanging around the 50 day EMA is pretty common, but you prefer to see it act as support, not a magnet for price like it is now. This is not to say that DAX is any serious trouble. In fact, I think you just basically are at fair value right now. That's your biggest problem. We have a significant amount of resistance above near the 24,600 euro level, but a significant amount of support near the 23,250 euro level. And we're basically in the middle of it. So, I think you will continue to see this somewhat sideways malaise going into the next week or two as volume starts to pick up in places like Wall Street.
We are exiting the holiday season for summer vacation. And that has a major influence on how a lot of these massive markets move. Furthermore, there are some questions about the Federal Reserve and what it is they are doing. While a September rate cut is expected, the question then looms over the trading world. Is there a problem with the global economy? Because after all, the United States is 25 % of it. So, I think you have a little bit of hesitation, but on the whole, I prefer to buy dips in the German index, rather than trying to short it, if we can break above 24,600 euro, and with any type of force, then I think we continue the longer term uptrend.
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