DAX Germany Weekly Chart; Above 11K; One-Year High

Europe's economic engine, Germany, is humming along. The DAX rallies last week on more QE candy from the European Central Bank. The DAX catapults +6.6% higher last week on the dovish ECB decision. Traders buy stocks without fear or worry singing, "Happy days are here again." The central bankers are the market.

The DAX is above 11,000 at a one-year high and on the verge of breaking out to a 17-month high. The red trend line and upper rail of the blue channel form a confluence of resistance at 11200-11300. Price is at 11204. The red lines for the indicators show negative divergence over the last few months, except for the RSI and MACD line that are flat and trying to turn positive and higher. Price is not above the 2015 high so negative divergence cannot exist over this 2-year time frame as yet, although the indicators are clearly sloping negative. There is some near-term momo remaining in the DAX which is not surprising considering the +7% upside orgy last week.

Price was squeezed higher by the tight standard deviation bands (pink arrows). The tight bands squeeze out significant moves but do not predict which direction. This one was obviously up. The middle band at 10585, and rising, is on the table since the upper band was violated. The DAX may line out sideways through the blue channel at 10,500-11,300 going forward. A breakout above 11.3K would be a big deal. The same analysis can be applied to France's CAC. 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.