Many times over the years, what the stock markets do in Germany and Europe, impacts stocks in the states. Several times Germany has been a leading indicator in bull and bear moves, ahead of what take place in the S&P 500. Below looks that the DAX index over the past decade and the important pattern that could be in play.

(Click on image to enlarge)

DAX hit the top of 6-year rising channel (A) back in 2015, then proceeded to decline to the bottom rising channel (A) 14-months ago. The rally off the 2016 lows, now has the DAX testing 2015 highs at (1), which comes into play as resistance.

A bearish rising wedge look to have formed over the past year, as support is now being tested at (2). If support would five-way, it would increase the potential the DAX has created a double top.

Bull in the states want/need to see the DAX breakout at (1). The bullish case for stocks in the states should start to get a little concerned if support breaks at (2), going into the “Sell In May” time frame.