Equity markets stay firm, aim higher

Intermediate
  • A solid advance into the end of last week across the major global equity markets, with the major European averages (not including the FTSE 100) pushing to new recovery highs for 2019.
  • This positive price action has reflected ongoing optimism around the US-Sino trade negotiations, the fact that the US government shutdown has at least been temporarily ended, plus a relatively positive earning season in Europe and the US thus far in Q1.
  • This points the major US and European indices higher into late January (possibly early February) and here with focus in the German benchmark average, the DAX.

 

DAX bull theme resurfacing

A strong advance Friday through the earlier recovery high at 11254 to build on the whole recovery since Wednesday’s setback held just above 11001 support (at 11007), sustaining upside forces from the mid-January bullish push through key 11245 resistance, to keep a positive bias for Monday.

The mid-January probe above key 11245 set an intermediate-term bullish theme.

For Today:

  • We see an upside bias for 11319.5, then quickly 11340; break here aims for 11410, maybe 11500.
  • But below 11221 aims for 11156.5 and then maybe targets 11098, which we would look to try to hold.

Intermediate-term Outlook – Upside Risks: We see an upside risk for 11558.

  • Higher targets would be 11814.5 and 12436.
  • What Changes This? Below 10779/778.5 shifts the outlook back to neutral; through 10673 is needed for a bear theme.

 

4 Hour Chart

dax chart

Steve Miley

Editor in chief

Steve Miley has 29 years of financial market experience and as a seasoned expert now has many responsibilities. He is the founder, Director and Primary Analyst at The Market Chartist, the Editor-in...continued

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