The DAX has fallen on Tuesday, as reports of missiles being fired at Dubai have rattled the markets again. Regardless, a pullback was probably needed.
DAX
The DAX has fallen again during the trading session on Tuesday. And a couple of days ago, I mentioned something about a potential rising wedge. And we have, in fact, fulfilled that here. We had seen it in a couple of different places, but the DAX was one of those places. And we are approaching the potential area of fulfilling that target.
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The 26,000 euro level underneath could be thought of as potential support. It's a large, round, psychologically significant figure. And it is an area that previously had been a bit of a ceiling.
Geopolitical Pressures and Technical Support
A lot of this, of course, is going to be predicated on the idea that the war in the Middle East is never going to end. The Iranians launched missiles at Dubai today, and that has people worried about energy supply in the European Union, especially this winter. That will put a beating on the profitability of the German industrial base, which, of course, is a big part of the DAX.
Nonetheless, when I look at the chart, to see a pullback, I think makes sense regardless. We just looked for an opportunity. We got a little ahead of ourselves there, and now a little bit of consolidation or perhaps pullback in order for people to take advantage of cheap contracts is what we need. We need more buyers to enter the market.
I don't think we're in the realm of panic by any stretch of the imagination, and sooner or later, things stabilize and the game continues. I remain bullish, but I'm standing back at the moment waiting for a little bit of a bounce, preferably near the 26,000 level, to take advantage of what is obviously a nice, strong uptrend.
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