I refer to messages posted on Nov.3rd and Nov.7th.
The aim was to « ..play a potential bounce from major index support. » (Post Nov.7th) by buying the DAX 2X ETF . And again the german index bounced from its 10250-10400 key support range with NO CLOSING below the 10250 point.
The very strong – Dax futures even touched levels below the 10000 bar yesterday morning, now at 10730 ! – and unexpected U-turn after Trump election seems overdone.
On a technical basis Dax is back near the top of its range – 10800/10830 closing basis– but nevertheless has the potential to go much higher IF it crosses the 10820-10850 on the upside on a closing basis with trend indicator (Daily MACD – bottom chart) crossing up at the same time . Initial targets would be then set at 11400 and 11800 for 5 to 10% gains by end of year . On the downside one should continue to watch the 10250-10400 levels with also the 200Days MA as support a bit lower.
As a reminder DAX is still down 0,50 % year to date (Eurostoxx50 -6%). Everything being equal most german (and european) companies might benefit from a weaker EUR / strong USD . The chances are great that Trump intended fiscal spending policy will be inflationary and drive the Fed to hike rates at a fastest pace than anticipated with positive impact for the USD / weaker EURO . A Euro in the 1 to 1,05 range would definitely not leave the european markets at current levels .