The DAX 30 (FXCM: GER30) is under severe pressure and has so far dropped by 442 points from yesterday’s high of 9759. The index is now just a few points from its 2015 low of 9303 and a break to this level may trigger a decline to the next major support level, which is the November 11, 2014 low of 9144.This seems fair at this stage given that the FXCM SSI Snapshot Indicator shows traders are still net-long (the SSI being a contrarian indicator).

For the short-term trend to turn neutral and bearish, traders need to abandon their bearish bets and the DAX needs to break yesterday’s high of 9759. Until this happens, I would expect the DAX to drift lower.

Traders who are not already short will probably wait for a correction to the 9489 to 9593 range before considering whether to participate in the downward trend. A better risk/reward ratio is assured in this range if price indeed reaches 9144 over the comings days.

U.S. Home sales and CPI are on tap today and I don’t anticipate that the DAX 30 will pay too much attention to this data given that the markets are concerned about the slowdown in China, softening U.S industrial sector and soft commodity markets. See our economic calendar.

DAX 30 | FXCM: GER30