The German index has been bullish on Tuesday, as the markets continue to focus on oil and energy in general, as the German industrial base will be in focus during the oil disruptions.
DAX
The German index has rallied quite nicely during the early part of the trading session on Tuesday as the 26,000 level has now offered significant support. At this point, it looks like we are turning the corner and we are trying to rally towards the 26,500 euro level, and area that has been important previously.
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The market has been fairly noisy, and the Ifo numbers really kind of calmed things down a little bit during the trading session, but ultimately, this is a market that I think, given enough time, probably finds a reason to get moving one way or the other. I don't have any interest in shorting the DAX. If we were to break down below the 50-day EMA, I will probably leave things alone and just move away from trading the DAX for some time.
Energy Dynamics and the 27,000 Target
I don't really, like I said, I don't want to get short. So, I'm long-only here, and I do think it's probably only a matter of time before we break out to the upside. If we do, then the 27,000 euro level would be a target over the longer-term.
The usual suspects are at play here. We're worried about the energy supply heading into Germany, but oil fell pretty early today, and that does help the DAX and its large industrial base components.
Regardless, even if you don't know anything about the DAX, you can look at this chart and see that it is very bullish over the longer term, and therefore, it makes a lot of sense that most people will be looking for an opportunity to buy on the cheap every time it pulls back in this trend.
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