The German index fell Wednesday to start things off, but then turned around to show signs of life near the 200-day EMA.
DAX
The German index initially fell during trading here on Wednesday but has turned around to show signs of life. By doing so, it looks like DAX is going to try to recover and perhaps people are not as concerned about the energy disruption as they once were. All of that remains to be seen, but it is worth noting that we are hanging on to the 200-day EMA.
The 200-day EMA of course is an indicator that a lot of people will watch, and this is an oversold market, so it does make a certain amount of sense that perhaps we will have to try to sort out whether or not the trend holds here. If we do rally from here, I would be concerned about a couple of places, but at the end of the day, most of what we have seen has been more or less panicking and less to do with the idea of fundamentals, at least yet.
TECHNICAL INDICATORS AND MARKET VOLATILITY
If we can continue to rise from here, the 25,000 level is obviously a major barrier that will take some pretty significant strength to break above. If we drop below the 23,600 level, then I think the market drops down to the 23,000 level rather quickly.
Ultimately, I recognize that the market is going to be volatile, but I think that's going to be a certain amount of reality in the market for the time being. With this, I'm waiting to see whether or not we get any follow-through, but this candlestick on Wednesday certainly looks very tempting and it looks like a very good sign. Anything above 24,400 I think probably gets a little bit of follow-through.