Potential signal
I am a buyer here, with a stop at 25,110 and a target of 25,600
DAX drops a bit during the early part of the trading session on Tuesday but did find a little bit of support to show signs of life. All things being equal, the DAX of course is the German index and therefore it is a major player when it comes to the European Union. It is also one that I think ends up more or less being the main driver of where other indices are.
If we can continue to go to the upside, I think that the DAX will continue to go much higher, perhaps the 25,600-euro level. If we fall from here, the 25,000-euro level is an area that I think despite the fact that it is a major resistance barrier, it is also a potential support barrier on the way back down.
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Market Noise and Energy Volatility
Ultimately, this is a market that I think continues to be very noisy. I think it continues to be driven by a lot of different things at the same time, not the least of which of course is going to be the fear of a lack of energy in the German industrial sector. After all, the Strait of Hormuz being closed is a direct hit on what Germany can receive and of course there was a lot of damage done to the liquefied natural gas supply coming out of Qatar.
Ultimately, this is a market that I am looking to buy the dip in and I do think that the DAX eventually goes much higher. After all, we have a massive spending by the German government ready to happen and that generally helps stocks in most developing and developed countries alike. All things being equal, I do believe we are looking toward the 27,000-euro level, it just may take some time to get there. I look for value in dips.
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