In our opinions the German stock market (DAX) is very important on a global scale. We feel its a driving force for many stock markets around the world.

This leader finds itself at very important price point at this time, which could become a high risk price point.

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The DAX has remained inside of clean rising channel since the 2011 lows. It hit the top of its channel earlier this year, attempting a breakout that failed and a 20%+ followed. The decline has not only taken the DAX down to the bottom of this rising channel, its actually slipped below support in late August, but did not close below the channel at the time.

After a small rally off the August lows, the DAX moved higher and then fell again, where it closed below this rising channel for the first time in 4-years. Now the DAX is attempting to get back inside the rising channel, as its now on the “underside” of old support. Now the old support becomes new resistance.

This morning the DAX is knocking on the underside of resistance, which comes into play at the 9,900 level.