- DAX continues to push higher, global equity sentiment well-bid (especially in the U.S.)
- Top-side levels to keep an eye on
- Going with the momentum, no need to be a hero here
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In Monday's post , we said the DAX (CAC, too) looked poised to continue trading higher. That sentiment hasn't changed, but upon approach of the Jan highs and beyond we'll take interest in how the market reacts to those levels. If Europe begins to mimic the U.S. (S&P 500), then levels up there could become levels down there, real fast. But while we don't expect the same kind of momentum to show up in other markets as we are seeing in the U.S., it's certainly a sign of warning for those trying to find tops in this up-move in global equities. You might not exactly be thrilled about chasing momentum, as we aren't either, but shorting it at this time (for anything outside a day-trade) is not an endeavor we care to partake in.
Levels to watch on the top-side start with the Jan high at 11893, and then just above there we have to go back to a swing high created in May 2015 at 11920 and a month before that at 12079. We'll focus first on those levels, worry about the record 2015 high at 12391 later should 'momo' really kick in.
Created with TradingView
Looking to the hourly chart, the surge starting last week is morphing into a sharply angled channel which could help keep short-term traders guided on the right side of the tape. Even if it were to break the structure a bit by moving outside of it, as long as higher highs and higher lows continue to etch themselves out then there isn't good reason to be a hero here trying to find a top. Again, though, for day-traders it's a different story, but will still likely to find it easier to be on the bid rather than the offer for the time-being.
Created with TradingView
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---Written by Paul Robinson, Market Analyst
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