I think you have to look at the 25,000 euro level as a potential area that people will look at through the prism of psychological resistance in the DAX playing the biggest part on Monday.
DAX
The German DAX is slightly positive during trading on Monday, but I think this is a good sign considering that we are at a major, large, round, psychologically significant figure. With that being said, I think you have to look at the 25,000 euro level as a potential area that people will look at through the prism of psychological resistance but something that we've already broken through previously.
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So, with that being said, I think you have a situation where short-term pullbacks offer buying opportunities with the 50-day EMA sitting right at the 24,500 euro level as a bit of a floor. Deutsche Bank was one of the big movers for the day and that continues to help the DAX.
FISCAL STIMULUS AND MARKET OUTLOOK
But let us not forget that the German government has suggested that they are going to spend a ton of money on the economy and that should, at least in theory, help stocks as there will be a lot of fiscal stimulus. This is something that the Germans are not known to do, but does tend to inflate stocks.
So, I think the DAX remembers this as a play like we see in the United States. This should send the DAX much higher given enough time. I do think that we will eventually get to the 25,500 euro level, possibly higher than that. Any breakdown below the hammer that was formed in the middle of last week on Wednesday could signal a more intense pullback and correction, but right now I just don't see that as it looks like the gap that formed on Thursday is...
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