- The DAX has rallied a bit during the trading session on Tuesday as there was some murmur about the United States considering a pause on automakers coming out of Germany.
- Whether or not that actually happened remains to be seen. I’ve also heard headlines about how the EU and the US can’t seem to come to any type of trade agreement yet. So, negotiations aren’t going that well.
DAX Has Been a Leader
Regardless, I think this is a market that had been bullish to begin with. So, it does make a lot of sense that eventually looks at this as a buy the dip scenario, especially with the 20,000 euro level being validated. I think you have to look at this as a market that is now going to focus on the 21,500 euro level, an area that has been a little bit of a resistance barrier as of late. Anything above there then has the market challenging the 50-day EMA. The 50-day EMA is sloping downward but capturing that would go a long way for market psychology. I still think that the 20,000 euro level is a major support level.
And with that in mind, you have to understand that there’s probably a lot of options barrier in that region, but there’s probably a lot of stop loss orders as well.
So, it could get volatile in that general area, but I think more likely than not, we’re going to see more consolidation with an upward tilt, if that makes any sense. This is a market that’s trying to stabilize and find its footing. As we are seeing across the world I think some of the exhaustion is from the massive amount of selling. There’s nobody really left to panic anymore. So markets are just aiming for some type of redemption, but we just don’t have it yet.
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