Chart of the day

Where do we stand fundamentally?

• Global Exposure: DAX companies rely heavily on U.S. (24%) and global markets, insulating the index from Europe’s stagnation.

• ECB Policy: Expectations of 100bps rate cuts in 2025 and a weaker euro boost export competitiveness and risk appetite.

• AI and Tech Optimism: SAP’s AI-driven growth (e.g., its "Joule" AI assistant) and Infineon’s chip-sector recovery have fueled investor confidence.

The DAX is testing 22000, which is now acting as strong upside resistance for an extension of the fifth long-term wave higher. This is strong near-term resistance for an upside continuation, and we need to see a breakout higher for an extension to 22500. A break below 215000 can invalidate a third long-term wave extension higher.

We are in a possible terminal phase of an uptrend third long-term wave with an indicated resistance of 22000. A breakout above this resistance will lead to an extension higher in the prolonged fifth wave and a rejection here will lead to a complete downside reversal.

_{You can take a near-term short-trade entry with an SL above 22000 to target 21000 and lower.}