DAX buyers in control
Gains this morning have stalled below 11,300, but this is understandable given investor reluctance to not believe a Greek deal until they actually see it. Daily stochastics have turned bullish for the first time in several weeks, so if the index can move above the 50-day SMA at 11,352 we may see further bullish momentum develop. The emphatic bounce off the 200-day SMA for the DAX yesterday is the clearest sign that buyers are back in charge.
With hourly stochastics still overbought the wisest course would be to wait for a move lower rather than risk watching the market move against you in the short term. Greece looks to be fixed, but there is always the possibility that the talks may be derailed, so it may best to sit and await developments.
Dow meets resistance at 17,730
Despite an overnight move higher, Dow Jones futures have stalled at 17,730, the same area as yesterday. For bulls this is a problem, and is not the only one to cause concern, since Tuesday’s highs at 17,800 will also prove to be problematic. Yesterday’s price action stalled at the 200-day SMA so this will be a key one to watch. A clearance of this indicator would then allow the market to head towards 18,000. However, assuming further progress in Greece and a quieter period in China, resurgent bullishness should drag us higher.