The DAX rose significantly on Tuesday, as we continue to see a lot of noise in the European indices.
DAX
The German DAX rallied rather significantly during trading on Tuesday as we have challenged the 24,400 Euro level again. This is an area that a lot of people will be watching very closely and an area that has been very noisy as of late.
With that being said, I believe that the DAX will continue to be a market that is going to continue to move on the latest concerns about the Middle East and of course interest rates in Germany, which are still above 3% on the 10-year. I do like this market longer term, but I also recognize that there is a lot of noise out there that could come into the picture to cause headaches and with that, you have to understand that the DAX probably remains in consolidation at least a bit.
Psychological Levels and Moving Averages
Ultimately, I think this is a market that eventually goes looking to the 25,000 level. The 25,000 level is not only a large and psychologically important figure, but it is also an area where we had seen a little bit of a gap previously.
Below current trading, we have seen market participants defend the 24,000 level or perhaps even a little bit lower than that where the 50-day EMA and the 200-day EMA indicators currently sit. Anything below there probably opens up pretty significant selling pressure to the downside, perhaps to fill a gap which would be down at 23,500 or maybe even 23,000.
Ultimately, the biggest concern Germany has at the moment will be whether or not there is enough energy later this year, which obviously would have a major influence on the German industrial base, which of course is massive.