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Although this short recommendation was subsequently 'stopped-out' on an overshoot, I still believe we are on the right path of thinking. The pull-back from the recent high has measured 4.165% so far, but just failed to trigger last week's advice to sell short any further fall below 8940. For the record, last week's low was 8984.
Although the DAX has proved to be more resilient than US or UK share markets recently, it is unlikely to move much in the opposite direction. Headwinds of falling US markets are likely to catch up with it in due course. In anticipation of this scenario, today I will fine-tune the level at which to sell the DAX and open a refreshed short position on the index.
A rally back to the top of my support/resistance band would provide the ideal opportunity to sell. This would unwind a slightly oversold Relative Strength Index reading, and take the index closer to its 50-day moving average.
Recommendation: Sell short on any rise to 9048, or on a break below 8942, whichever occurs first. The target becomes 8640.