Most of the European traders came back to the market today, why it is important we will tell you later but first we need to deal with our previous piece about the DAX, which was written on the 3rd of December. Back in that day everything was about the local gap:
“Do not forget that gaps love to be closed. Thanks to this, we expect a short-term drop aiming the daily close from Friday. After the gap will be closed, we should see a further upswing, at least that what an important principle of the price action is telling us. „
The gap was closed indeed, so all was good…till that point. After traders closed the gap they did not stop on that. The price continued to go down, crashing the 11k support (orange) quite easily. Then, we used that as a resistance, which only added a bearish confirmation here. OK, lets come back to the importance of why Europeans started today, not yesterday like Americans or some Asians. Well, Europeans may be lucky because they might have missed a false crazy surge seen yesterday. Many indexes made the best daily jumps in years. Now its all being heavily corrected so we can see that this buying panic could have been fake. Europeans are lucky cause they missed it, it’s simple. Germans, in particular, seem not to be bothered about the post-Christmas stock miracle from Wall Street. The price is going lower and the sell signal is still pretty strong.