Below looks at the DAX index from Germany over the past decade. The DAX index looks to be creating a bullish continuation pattern, that the Power of the Pattern feels, is important to investors in Europe and the States.
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The lower left of the chart above reflects what an ideal “Cup & Handle” pattern looks like. These patterns historically take place in bull markets and are viewed as “continuation patterns.”
Below looks at the DAX/SPY ratio over the decade and why the ratio could be forming an important pattern too.
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Since the lows in 2003, the DAX has been much stronger than the S&P 500. Since 2008, the ratio has traded sideways, reflecting that the DAX and S&P have been traded off being stronger than another, no clear winner. At this time the ratio could be forming a reversal pattern (bullish inverse head & shoulders pattern) near the bottom of a 6-year trading range.
Joe Friday Just The Facts; A breakout above the top of the Cup & Handle pattern would send a bullish price message to the DAX. Strength in the DAX has historically been a positive for stocks in the states.
Bulls in Germany and the States have fingers crossed that the DAX breaks above 2015 highs!
