The German index rallied during the trading session on Thursday, reaching down towards the €13,000 level to turn around and rally significantly. As we approach the €13,150 level, I think that the market will then continue to go much higher, perhaps reaching towards the €13,350 level. I think that pullbacks will continue to offer buying opportunities, and if we can stay above the €13,000 level, it’s likely that the market is ready to continue to go much higher over the longer term, perhaps trading to the €15,000 level longer term. I believe that money will continue to flow into the DAX, as it is the bellwether for the European Union.
I believe that the €12,800 level underneath is the “floor” in the market, so if we were to break down below there I think we could see a bit of a downturn, but I think that the likelihood of that happening is pretty low. Ultimately, I think that the market is trying to form a base, and perhaps some of the selling recently has been due to traders closing out the positions at the end of the year, showing their clients profits. Ultimately, I believe that as we go higher, you can add slowly to your position on dips, as it gives you little bits of value, in order to add to your core position. I don’t have any interest in shorting, and until we break down below the €12,800 level, and even then, I would probably only put on a position that’s half the normal size.