- The German DAX has shown itself to be slightly positive for most of the week, but it is worth noting that Germany was closed on Friday, and now looks ready to attempt a breakout.
- All things being equal, when I look at the chart, it is obvious that we are getting close to the top of the range that we have been in for a while.
- The 24,500 Euro level extending to the 24,750 Euro level is a significant amount of resistance. If we can break above that level, then it is likely that we could go looking at the 25,000 Euro level.
Short-term Pullbacks and Economic Factors
Short-term pullbacks, I think, remain buying opportunities in a market that has been consolidating for six months after a vertical move to the upside. Short-term pullbacks that break down below the 50-day EMA could go looking at the 23,500 Euro level, maybe even the 200-day EMA, which is closer to the 23,300 Euro level.
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The floor in the market currently is 23,000 Euro, and as long as we can stay above there, I don't know that anything has changed. It will be interesting to see how DAX behaves at the beginning of the year because, of course, it has been so range-bound; we need some type of external factor to get things going. Whether or not the DAX can take advantage of that remains to be seen, as economic numbers in the European Union are okay, but not necessarily great. A lot of this could come down to the money that the German government is going to be pouring into the country's manufacturing sector via expenditure bills, but so far, that has not been enough to get the DAX really rocking to the upside. I do think that 2026 ends up being a positive year, though.
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