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The DAX and Euro STOXX are closing in on 2012 highs with the S&P and other US indices lagging. This sets up an interesting situation with the potential for a significant divergence between the DAX/Euro STOXX and the US indices. Markets do not tend to “hang around” when approaching significant previous highs or lows; they are likely to either sharply accelerate through the previous high or low, or to sharply reverse. If the Euro STOXX closes below 25190, and the DAX closes below 72650 it signals that the November lows will probably be taken out.
It is highly probable that the US indices will follow the imminent sharp move in these two indices. Be alert!