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  • A shift to a more “risk on” environment has continued to develop through early 2019, building on latter 2018 recovery efforts across major European, US and Asian equity markets.
  • This positive price action has been reflected by the major global averages overcoming notable technical resistance levels and was further enhanced by particularly strong price action last Friday in the wake of a Reserve Requirement Ratios cut by the People’s Bank of China, a strong US Employment report and a more dovish tone again from the Federal Reserve’s, FOMC Chairmen Jerome Powell.
  • This sets risks higher for major averages in the very near term and here we spotlight key upside targets for the German benchmark average, the DAX.

 

DAX risks stay higher for an intermediate-term shift back to neutral

A probe higher Tuesday to a new recovery high to reinforce Monday’s rebound from above 10597 support (off of 10673) AND from Friday’s surge through 10638 and 10707 resistance barriers, and a push higher already this morning leaving risks to the topside Wednesday.

The early December plunge below 11000 set an intermediate-term bear trend, BUT risk is growing for an intermediate-term shift back to neutral above 10975.5.

For Today:

  • We see an upside bias through 10939.5; break here aims for key 10975.5 and 11000, possibly even 11077.5.
  • But below 10860.5 aims for 10738.5 and opens risk down to 10673.

Intermediate-term Outlook – Downside Risks: We see a downside risk for 10268.5 and 10000/994.5.

  • What Changes This? Above 10975.5 shifts the outlook back to neutral; above 11245 is needed for a bull theme.

 

4 Hour Chart

dax future