The DAX has rallied again in the early part of the Tuesday session, but more importantly, has held onto most of those gains.
DAX
The DAX has jumped during trading on Tuesday to break above the crucial 25,000 euro level. The 25,000 euro level is an area that we've seen a lot of resistance at, and the size of the candlestick does suggest that we have a lot of buyers jumping in. We are closing at the top of the candlestick for the session.
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I think ultimately this is a market that if we can break above the 25,250 level, then the market is free to test the highs again. The German index has been very bullish for some time, and I think nothing has changed here. This remains a buy-on-the-dip market at this point in time, and I think there is a significant amount of market memory willing to help keep it supported.
Macro Drivers and Industrial Export Support
With the German index being the gateway to Europe, if we continue to see the Euro look fairly weak and the yields in America stay strong, that tends to benefit the DAX as it makes the Euro stay soft. Exports to places, specifically the United States, really take off, and that can help the major industrials in Germany. Remember, Germany has a massive automotive and industrial export base that is a huge part of the DAX.
That being said, we have not cleared resistance until we break above the 25,250 level, and until then, I also think we have to look at this as a market that will eventually try to reach the highs, but that doesn't mean it's going to be a clean move. I look at short-term pullbacks as potential buying opportunities. I like the fact that we're in an uptrend, but it's a grinding uptrend; it is not one that is very quick. Patience will be needed to ride out this wave.
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