look4edge
Long

DAX - COULD NEW ATH START FIREWORKS?

FX:GER30   DAX index of German listed shares
110 0 2
LET THE CHART SPEAK.

I plotted simple linear channel through lows 2003-2009 and high 2000.

In October 1999 started terminal move after correction of new ATH             in 1998, index exploded that time 3.000 points.
October 2014 looks very similar, DAX             finished the correction of new ATH             (at the same 76.4 parallel line as 1998 ATH             ) and reversed from bottom dramatically. CCI patterns are of same kind. Speed of uptrend is the same. Different are the corrections before, pattern in 1999 was downwards limited, looks like C failure pattern (i am not an EW expert), indicating underlying strength, current correction was downwards extended, partly also because of euro             slide.

Maybe DAX             can turn down on a dime just now, but LAST SERIE OF SUPERLONG WHITE WEEKLY CANDLES hardly could support such possibility. It rather looks like TREND ACCELERATION in "Catch me if you can" style. I do not know what is behind such huge reversal and who are the buyers and what amount of money they have, but it happened.Therefore uptrend continuation can not be excluded from possible scenarios. I have found an article http://www.zerohedge.com/news/2014-11-22/veteran-sp-futures-trader-i-am-100-confident-central-banks-are-buying-sp-futures. I do not know if that is the reality and what are the central banks actually doing, but the uptrend probably will go further untill the point when longs (the weak ones) will start selling (question is what will iniciate it) and buyers, algos or whoever will stop buying, only then selloff will occur. This would be just another round of wealth distribution, another shake-off. Price does not matter, but the share on wealth does. Btw. volume is still much lower than at previous peaks, it needs to pick up before the selloff, unfortunately DAX             volume is not on this platform, you need to check it somewhere else.

Year 2000 was extraordinary by any means, can we get repeat of it this time? Maybe yes, maybe not. Current biotech bubble is unfolding very nice, NASDAQ is pacing to its ATH             , DJ Transportation Average (leading indicator) is above all its previous trendlines (also in log chart). Could oil             price meltdown be the catalyzer? Or european version of QE? And what will cause all the magic coming from realized QE? European economy is still sluggish, so there is also a chance for improvement.

EUSTOXX50 has potential around 10 pct up to longterm descendent trendline in 3550 area. SMI             index finished 1.5y correction and already broke up towards ATH             (5 pct). So it is not unrealistic for more volatile DAX             to imagine, that it has another 15-17 pct left in the bag.

So, i would be very watchful of any DAX             reading above 10150. Downwards triggers are 9350/9150, support at 8500.
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