The weekly chart of the Dax shows no signs (yet) of exhaustion. The pullback on the preceeding high has been neutralized by buyers who bought the change of polarity. A litle hammer is in formation and suggests some potential follow through next week. I see no evidence yet of a trend reversal. The medium term trend is up until proven otherwise. In our case, only a break below 1950 would negate it. The RSI is still strong and shows no divergence of fatigue. I am therefore expecting another weekly high in the near future.
I am currently monitoring the EURUSD since the european currency showed some renewed strength lately. That could be one of the reasons not to be over optimistic on european equities, inclunding the DAX.
I am currently monitoring the EURUSD since the european currency showed some renewed strength lately. That could be one of the reasons not to be over optimistic on european equities, inclunding the DAX.
Comment:
Last week's candle did not finally fully materialize into a hammer. The bullish consequences are therefore less strong. I would have prefered to see a long shadow and a small body. It is not what happened. The candle's body is too long to be correctly interpreted as a hammer. Bottom line : there is still some incertainty about a possible bounce this week. We will see if the bulls are able to push the price high enough to make it close above last week's close. I don't feel very confident about the market structure right now and would not risk much money for the time being.