Market Analysis - DAX and EUROSTOXX 50

The EUROSTOXX 50 retraced back to the recently mentioned level around 2770 and even a little bit further.
After that it surged back up to the top of the wedge. Around 2960 there is the next resistance back from 2009.
At this resistance the EUROSTOXX 50 will rest for a while. After that there is the chance to retest the highs from 2010 or to fall back down. Support is above 2850 or below that the rising trendline of the wedge. Usually such a rising wedge breaks to the downside, but if it breaks with momentum to the upside and takes out the highs of 2010 you should definitely be a buyer of the market. On the other side you have now a defined stop if you want to short the market and also a nice risk to reward ratio.

The XETRA DAX gapped up today. The next chart shows, that the DAX usually gaps at the beginning of a move or near the end of a move. There are three types of gaps: breakout gaps, continuation gaps and exhaustion gaps. The last uptrend since October started with a typical breakout gap, then in mid-November you can see another gap. This is a continuation gap which usually indicates that half of the trend is over. And last but not least today could have been an exhaustion gap.

The next chart of the XETRA DAX shows that the RSI and the Momentum indicator did not confirm the breakout. Furthermore the two year resistance trendline is just around 7200 (on the logarithmic chart). Until the gap gets closed the trend remains up but get cautious if the DAX falls back below 7040.