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Index has a very volatile Thursday

Any opportunity to short this market upon exhaustion will be seized.

The German index moved back and forth for most of Thursday’s trading session as questions continued to rage on the global economy. The futures markets fall to the 13,500 level where you would expect some psychological support and then bounced back to end the day somewhat flat. That suggests we might get a little rally, but that rally isn’t something I’m keen to believe in.

The €13,750 level above is a bit of a barrier as it was previously supported. The 50-day EMA is above it and hanging right around the €14,173 level. It drifts deeper and has been dynamic resistance more than once. Because of this, I think the first signs of exhaustion are more likely than not to be sold.

Keep in mind that there are many concerns surrounding the global markets and global economy around the world, making it difficult to imagine a scenario where you would want to jump in and start buying an index. That being said, we could maybe head into the weekend with a bit of a rally for a simple short cover. Only if we surpass the 50-day EMA and even the $14,500 level would I be a buyer. After that, the €15,000 mark would be the next goal. Not until we break through up there would I go long because I think there are far too many potential issues out there to derail any type of risk-on rally that we would see in any of the indices, let alone the Dax.

Keep in mind that the European Union has presented less than attractive economic numbers and of course it makes sense that we continue to see plenty of fear when it comes to the markets as the world gravitates towards the US dollar on safety grounds. Interest rates in Germany reflect serious concerns about the general outlook for the German economy and the rest of the European Union. The DAX is full of big exporters and so the devastation we are seeing around the world will be felt in this market. Any opportunity to short this market upon exhaustion will be seized.

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