Stock markets turned bearish again on Tuesday during the US session after a strong rally in the European session. It has been a one-way road since then for stocks and the bounces have been quite weak. Yesterday the FED turned more dovish than markets were anticipating which hurt the sentiment further, sending major indices lower. On one hand, a dovish FED would mean lower rates for longer which is supportive for stock markets, but the immediate reaction is bearish and the sentiment has turned negative.
Although, we decided to go long on the German DAX as it was finding support at the 100 SMA (green) once again on the H4 time-frame chart. The bigger trend is still bullish and this moving average has been providing support before, which is why we decided to go long. There was a bounce higher overnight but the downtrend resumed and the 100 SMA was finally broken during early European session today.
The low on my platform was at 11,535, but now we see that the buyers are trying to reverse the price back up. The price is flirting with the 100 SMA from the downside at the moment and if the buyers manage to push above it, then I think that the reversal will be underway and the bigger bullish trend will resume, so fingers crossed.