DAX at key crossroads
The DAX has managed to rally into a major area of resistance, above which we could see a sharp appreciation for the index. The 10,807 level represents the August peak, which was temporarily broken yesterday to create a nine-month high.
As such, we are at a crossroads, where we will likely either see a sharp pullback, or significant appreciation. Watch out for a strong four-hour close above 10,807 as a signal we are due to see another major leg higher for the index.
Dow rallies into key resistance zone
The Dow Jones managed to temporarily break above the crucial 18,257-18,264 resistance zone yesterday, providing a somewhat mixed picture for the index. Given the creation of higher highs and lower lows, we need to see the next move to gain confidence of the short-term trajectory.
That said, the wider picture portrays a market which is rolling over. As such, we could be seeing a deep retracement of the sell-off seen on the October 11.
Watch out for resistance around the 18,300 mark (76.4%) should we see another leg higher.