To me it seems that the German DAX 30 is still consolidating before moving back higher. My upside target is around the highs of February (7400). There it will be critical to take out the recent highs around 7600. That will be quite difficult because my opinion is that we are already near a top. But now back to the shorter term picture. There is still a gap open between 7184 and 7193 which I expect to get closed. Right there is also the declining trendline. For sure the DAX 30 could test before a gap close the 50 week moving average around 6850 but the declining line from the February highs to the March/April high held so far as support. If you are short the DAX 30 be aware that above 7200 a fast short-squeeze could occur up to 7300.
The NIKKEI 225 has build a more sideways than downward channel since mid 2009. I am not expecting a near term breakout of this channel. In the short term the recent lows around 9350 must hold as support otherwise a retest of the Fukushima lows is in the cards. On the other hand a break above 9750 will send the index to 10000 and afterwards the upper trendline will get in focus.
The Spanish IBEX 35 is an underperformer compared to the German DAX 30. The index is forming a triangle since 2010 and on a logarithmic scale the IBEX 35 already broke to the downside. Shorter term I want to emphasize the 9800 level. It was resistance many times in 2008 and 2009 and should act as support. Since mid 2010 the 11000 level acted as resistance. I will watch a break under or above these levels for a trading opportunity.
Please feel free to leave any comments or send me an email.
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