- The German index has rallied a bit during the trading session on Tuesday as the markets continue to hover around the 50 day EMA. The 24,000 euro level just above is a bit of a large round psychologically significant figure and a barrier. So, with that being the case, I think if we can get above 24,000 euros, that lets the market go much higher, perhaps to the 24,500 euro uh level. That is the top of the overall range. And therefore, I think you need to pay close attention to whether or not we explode to the upside because if we do,
- that's where we're going. The market also is worth looking at through the prism of dips being opportunities to buy cheap contracts. When you look at the longer term move, the DAX has been rallying for quite some time.
An Important Support Level
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But really, I think ultimately, as long as we stay above the 23,000 euro level, you have to assume that we are going higher eventually. I think at this point in time, Germany might attract a bit of inflows just simply because the economic situation is so-so out there. But if you are going to invest in Europe, Germany is the first place you go. If you’re not willing to go far out on the risk appetite spectrum, the 200 day EMA is racing towards the 23,000 level as well. And that is a major floor in the market. Ultimately, it's really not until we get a daily close below the 200 day EMA that I even begin to think about shorting the DAX right now. To me, it looks like if you get an opportunity to buy it on a pullback, that is a good opportunity to take advantage of what has been a pretty significant range-bound market since the middle of May.
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