DAX
The DAX in Germany has shown itself to be extraordinarily positive in the early hours of Monday as traders continue to look at this as a market that will continue to move on the latest headlines coming out of the Middle East. After all, a lot of people are concerned about the supply of energy in the German industrial sector, as it, of course, is very sensitive to input costs.
I think this is a situation where we have a market that offers buying opportunities anytime it dips, as the Germans are most certainly going to benefit from stimulus and the expanded infrastructure spending that the Germans are set to do.
I think you also have to understand that traders are also going to be very quick to jump out of the markets if the market were to suddenly get headlines that contradict any type of positivity.
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Middle East Fluidity and Support Levels
I understand that this is a market that is going to be very noisy and recognize that the situation in the Middle East is a very fluid situation and that 1 bad headline could send everything selling off.
I do think that over time we've seen a deliberate move by Americans and Iranians to look for some type of off-ramp and therefore the energy should flow back to Germany.
If we were to fall from here, look for the gap to get filled, sending the market down to the 24,600-euro level. The 50-day EMA is at 24,500 euros, which could offer support as well.
If we do break to the upside, then we could see this market go look into the 25,400 euro level, but I think this pullback probably offers a little bit of value that most of you would do well to take advantage of by buying on the right-hand side of the V once it forms on the charts.
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