- The German index has gapped higher to kick off the trading session on Wednesday, as we have gapped and jumped above the 50 Day EMA.
- At this point in time, the DAX looks as if it wants to go higher, but keep in mind that this is a market that also has quite a bit of supply above, especially near the €22,500 level.
The German index is an index that a lot of people will like if the European economy does in fact start to grow. That being said, the PMI numbers during the trading session on Wednesday were contractionary, so there will be a lot of questions asked about Germany overall. That being said, momentum is one of the most important things to pay attention to, and as things stand right now, it looks like the momentum is with the Germans.
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Technical Analysis
The technical analysis for this market is rather strong, but you also have to ignore the fact that we just fell drastically as the tariff situation continues to be something that a lot of people will be paying close attention to, and therefore unfortunately this market is driven more by the latest tweet or rant than it is any type of actual technical set up, or even fundamentals for that matter. Tomorrow we could be down 6% and it wouldn’t surprise me.
Because of this, I’m using the €21,500 level as a short-term floor in this market and look at short-term dips as a buying opportunity but I also recognize that we could go as high as €22,500 above, which I see as the short-term ceiling in the market. In general, this is a market that I favor to the upside, but I also recognize that the headline noise is going to continue to be a major problem as computerized trading continues to freak out at every headline.
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