Sunday, December 7, 2014

DAX Germany Monthly Chart Record High Negative Divergence

The DAX is at historic highs above 10K nearly to 10100. The red lines show the negative divergence spank down in 2008. The maroon lines show the neggie d spank down earlier this year. The DAX recovers printing new record highs and the red and blue lines for the indicators show universal negative divergence across all indicators across the short and long terms, respectively. The expectation is that the DAX would place a multi-year top at the current levels into early 2015.

The central banks are powerful and the ECB wants to announce a sovereign bond-buying program that would benefit Germany further but Germany is opposed to the Keynesian spending spree. Technically, the above is not a chart you want to be long. Watch the MACD cross closely going forward to see if the bearish cross remains. The two-decade neon lines show a very long term rising wedge in play so price may retrace to 8500-ish and bounce again but that assessment would have to occur months ahead.

Anyone long German stocks are drinking beer all weekend long, drunk as skunks, celebrating Octoberfest well into December, however, it would be prudent to be scaling out at these lofty prices since the chart clearly favors the bears going forward on a monthly basis. If the bulls are going to thrust above the upper trend line they need the MACD cross to turn positive to prove they have the juice. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

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