Both the DAX and the CAC 40 show a pattern of trending that is struggling upward since December. Whenever this index broke to a new high it would immediately dropped back below that high. The move down would quickly find support at a high level and again attempt to breakaway and fail. Whenever there is congestion like this the index is building for a fast move. Supply and demand are becoming equal and one is going to take control.
The indication for a fast move up is a low on top of the congestion as I’ve illustrated on the chart.
And an indication of a fast move down is a lower high. You can see the last time there was a similar congestion and the signal for a fast trend up was Mid-October highlighted by the arrow.
