DAX Xetra (cash index)
In the wake of a break to the highest level on the DAX since October, the market is finding consolidation setting in.
The importance of this consolidation is elevated on consideration that the market hit 11,725 on Friday which is the bottom of the long term pivot band 11,725/11,865 at which point the bull move has stalled.
At this stage this consolidation is just a pause in the run higher, as there is a continued positive bias to momentum which suggests that buying into weakness is the strategy.
As things stand, yesterday’s mildly corrective candlestick has not been followed through this morning, as a rebound has kicked in.
However, until the market trades decisively through 11,865 there will be question marks on the rally.
The uptrend of the past five weeks continues to run higher and is supportive today around 11,600.
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