The 25,000 level is the area where we continue to see a lot of back-and-forth trading, as it is a bit of a magnet for price action at the moment.
DAX
The DAX initially tried to rally a bit during the trading session but gave back some of the gains as we continue to wrestle at the 25,000 level. The 25,000 level is an area that I think a lot of people will be watching very closely as it's a large, round, psychologically significant figure obviously, but it is also an area that has seen quite a bit of noise as of late.
So, with that being said, I think you have to look at this as a market that is likely to continue to see a lot of volatility and choppiness, but I also think it's a market that you need to look at through the prism of trying to go higher over the longer term.
Market Drivers and Technical Outlook
The slightly bearish tilt that we had at the end of the session was basically due to thin liquidity coming out of the United States, President's Day, and New York traders just weren't involved. While the morning did see some cautious optimism driven by a rebound in some German banking stocks like Deutsche Bank and Commerzbank, the defense gains following the Munich Security Conference also added to some of the strength, but we just saw a little bit of a fade late in the day.
There does remain a tug of war between disinflationary tailwinds and stagnant growth. So I think you continue to see a lot of noisy behavior, but if and when we can clear these 25,000 barriers, I think we can really start to rise from there. I have no interest in shorting. I do believe eventually we see a breakout, it's just very stubborn and very tight at the moment.
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