The German index fell on Thursday, as we continue to see a lot of noisy behavior. The concerns about the energy situation in the Middle East and the inflation that could come with it remain a major sticking point.
DAX
The German index broke lower during the trading session on Thursday as we continue to see a lot of noisy behavior and sliced through the 50-day EMA again. In fact, we broke to a fresh low over the last couple of weeks. But furthermore, we are starting to see a market that is trying to recover as we are now bouncing from the extreme lows.
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I think ultimately this is something that you need to pay close attention to because, despite the fact that there has been a lot of negativity and ugliness, the reality is we can't quite stay down. That tells me that perhaps the DAX will continue to see a little bit of inflow. If we break down below the lows of the trading session from Thursday, that would be a very negative turn of events, perhaps opening up a move down to the 200-day EMA.
Technical Retracements and Structural Support Levels
That being said, if we can recapture the 50-day EMA, I think that's a bullish sign, and eventually we go looking for a break above 25,200. Clearing that, I think, opens up a run back towards the all-time highs that have recently been seen in this market.
The DAX is still very bullish. It's been a bit choppy and noisy, but when you look at it through the longer-term prism, it still is bullish, and I still like the idea of buying the market on dips that offer value. I don't want to put a ton of money into this market, but I recognize that if this continues, then you continue to see value hunters out there in Germany.
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