The DAX Index (Germany) has been experiencing a negative divergence to the S&P 500 for nearly 20-months?
Could it be sending a negative message to stocks in the states in the near future? Possible!
The DAX index has created a series of lower highs inside of falling channel (1). The rally off the Christmas lows saw the DAX hit the top of this falling channel about a month ago, and so far has been unable to succeed in breaking out.
Weakness over the past month has the DAX testing rising support off the Christmas lows this week at (2).
If the DAX breaks below this rising support line, it will send a negative message to stocks in Germany, Europe, and the States.
Keep a close eye on what the DAX does at rising support, as it could send an important message to stocks in the states!