Monday, 2 July 2012

DAX testing corrective trend channel line, watch for turn lower

The emotional focus of the financial world is currently on Europe. I find that when markets get hyper-emotional, technical analysis is at its most useful. The German DAX is now clearly testing the top of a corrective trend channel, by which I mean an upwards correction against the preceding bear trend. A move above the top trend channel line and especially above 6600 would open the way for further gains. The other side of the coin is that right here right now would be a neat place for the DAX to turn lower, likely taking other equity markets with it.