- The German Dax has shown the market to show upward pressure with the €18,000 level, an area that a lot of people will be looking at as and an area of interest.
- The 50 day EMA since underneath there and therefore I think it offers a certain amount of support if we can break above the highs of both Friday and Monday, then I think the Dax has a real shot at going to the 18,500 level.
- This is an area that we have seen selling in the past, but I think it is only a matter of time before we break through it overall.
At this point, the market is likely to continue to see a lot of volatility. And with that being said, I think you have to be very cautious with your position sizing. Nonetheless, if the Dax has shown itself to be resiliently bullish and the fact that we have pulled back just a bid offers enough value that I think people would get involved.
A Recent Small Drop Offers Opportunity
When you look at this drop of about 4%, it could very well end up being a buying opportunity. The 50 day EMA offers a significant amount of technical support as well, and as long as it looks like the ECB is going to be cutting rates, it's very possible that you will have the Dax be the first place people throw money at.
I have no interest in shorting this market and even though we have had this a little bit of a pullback, we are still light years away from turning around and showing any proclivity to drop for a significant amount. So, with that being said, I think you have to keep in the back of your mind that this is a market that you have to be very patient with. You probably don't want to have a huge position in, but you certainly should see this as a market that could rally over the next several weeks, if not months.
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