DAX - How can we fit a strong rally

FX:GER30   DAX Index
189 0 4
Fundamentally, despite the deflationary atmosphere, there are good reasons to fit a strong rally:
1) German DAX             has a big portion of its sales in USD and is Industrial skewed and EURUSD             Fell 20%.
2) Valuation are currently at 10 for the DAX             versus 17 in the US.
3) After QE announcement, rates are close to zero on a 10y basis (much lower than the US equivalent).
4) DAX             has been flat for a year in 2014.

The first move up was swift and fed by all the reasons above and also the fact that there were many shorts in place.


A strong rally has to be slow to avoid hiting into speed resistance too soon and trigger large corrections.
if the dax             is to remain strtong for a long while after marking a top in the next week, it will have to relax and start to move at a slower pace probably in the "green band".
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