Preparing to Short DAX as German Stock Index Reaches Double Top

Includes: DAX-OLD, SPY
by: Simit Patel

The DAX (aka GER 30), a stock market index of Germany, is approaching a double top after a steady uptrend on the daily timeframe. The chart below illustrates.

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The monthly chart, however, shows a potential double top looming as well, if the market can reach the May 2008 relative high beyond 7230.

Click to enlarge

Based on these charts, I think we may find a reversal of the uptrend in DAX.

S&P traders may wish to observe the correlation between DAX and the S&P 500.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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