The German DAX touched in October the 200 day exponential moving average and sold off hard afterwards. Since then the DAX stabilized between 5800 and 6200. Even tough it is still in this range I think a break to the upside is imminent. To me it does not look like a completed top! At least the 6400 area should be retested maybe in the upcoming week. I am expecting a weak start into the trading week ahead but until Thursday the DAX could rise to 6400. Above that 6600 seems to me like a reasonable level for the DAX to reach in the next few weeks. If we will get a very strong year-end rally the DAX can even rise to 6990 (former level of support). But that should be at least a medium term ceiling for the DAX. At this point I am expecting a huge sell-off in 2012 and I will post if anything changes in that forecast!
I know this is a bold call but I am risking it!
The SPY (ETF on the S&P 500) also consolidated after the recent highs. If the SPY gets up to the highs from October the DAX would be around 6400 and if the SPY would rise to 132 (the declining trendline) the DAX would rise to 6600! These are very key levels in my opinion. As long as 5750 in the DAX and 123 in the SPY hold as support there is no need for shorting the market in the intermediate timeframe!
No comments:
Post a Comment