On Tuesday cash DAX gave back all of its Monday gains. Looking solely at the last two sessions, a bearish formation seems to be forming. The market is extremely overbought. However, we have to respect the trend which is still up. The market closed just below psychological support offered by the 12.000 level. Some correction from all-time highs maybe necessary to absorb recent gigantic gains. Fundamentals speak for a continuation of the uptrend as the weak Euro-currency helps German exports and the country’s bond yields are at record lows courtesy of ECB’s bond-buying program. We are buyers on pullbacks to support and don’t consider shorting this market just because it has run too far too fast.
DAX-30, hourly chart:
Chart from Investing.com. http://investing.com
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