Watch your DAX

The German DAX has been a good barometer for all things global. When it broke below its 200day moving average and looked like it was going to roll, global equities also looked vulnerable. Now that the index has recovered and raced back to resistance, we are experiencing a similar move here in the US.

Keep an eye on the support and resistance lines as outlined below, and more importantly look for a high volume break that is sustained for at least 2-3 days, for a continuation move in the direction of the break. Equities here and likely in Europe have been advancing on weak breadth and volume, but a convincing move over resistance could get things moving aggressively and catch investors off guard.