The German DAX continues to hang around the 25,000-euro level, as we are looking at a market that remains sensitive to the Middle East situation, as energy supply continues to be a potential threat.
DAX
The German DAX has been noisy during the trading session here on Friday as we continue to hang around the 25,000-euro region. This is an area that I think will continue to be very important. It's a large, round, psychologically significant figure, and I think it is an area that's been noisy in the past.
All things being equal, this is a market that I think eventually goes to the upside, mainly due to the fact that the market participants are likely to focus on the idea that the German economy could be boosted by massive government spending. Even if we break down from here, I think the 50-day EMA sits right around the 24,600-euro level, and I think that is a bit of a floor.
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Upside Targets and Energy Concerns
If we break to the upside, the 25,500 level is a massive swing high, and if we can break above there, the market could go much higher. I do like the DAX in general, but I also recognize that there are a lot of concerns when it comes to a potential lack of energy in the German industrial base, which is a major driver of the DAX.
All things being equal, I do think we are going higher, but I just recognize that it could be very noisy along the way. If we can get lasting peace in the Middle East, that might be exactly what we need to get this market rallying again. This is a situation that will be very noisy, but at this juncture, I still favor the upside, with a longer-term look at much higher levels.
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