The German DAX index closed at a new 52 week high today. This is important. It should be telling us something. It is telling us that bearish fumes are evaporating quickly now as we move well into the second half of 2010 and that bulls may want to start running again as the consumer comes out of the shadows again.
Despite the new 52 week high today for the DAX there is still room for another downward consolidation. But if a downward consolidation starts it is well supported by a very strong demand line that appears to be the bottom part of a large ascending triangle formation since April 2010.
It is very difficult for me to see anything bearish about the DAX right now. I think it is another little clue about what the US markets will do soon.
It is interesting to me that the DAX is leading like this. Clearly it has a lot to do with the Euro that was absolutely clobbered in months past and made German goods more competitive to the rest of the world.
This consolidation since April 2010 is a good 3.5 months of sideways cause which is more than sufficient fuel or energy for a new more sustained move.